The tech trade appears to be reviving, which is more than can be said for gold, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
Stock markets grind back into action
It has been a lugubrious start to the week for stock markets, particularly in the US and the UK, but things have begun to liven up, particularly for last week’s also-rans the Nasdaq and the Nikkei 225. Jitters about tech and normal rotation action within sectors took the wind out the rally for both indices, but they are leading the way once again in afternoon trading, an indication that the rally might be poised for another leg higher.
Dollar recovery hits precious metals
Thursday’s payrolls and a long weekend meant that the dollar was a prime target for profit taking, but the greenback has clawed its way higher since then, leaving gold and silver perfectly poised for a new leg lower. Inflation fears might be receding, but the dollar’s resurgence has effectively nullified that advantage for gold and silver. Their best hope now is that Warsh can tone down the rhetoric as CPI data comes through next week.