Market Overview - Page 26

Gold has experienced an epic rally, reaching historical highs above $3350 per troy ounce, with the potential for further gains above $3500.

Despite extreme fear in the markets, history shows that buying on downturns can be profitable and provide an upward bias. The S&P500 has held above the 200-week moving average, an important support level, and the RSI index is showing signs of rebounding.

The correlation between the dollar and promised tariffs is evident, as trade barriers lead to a sell-off in the US currency. This decline in the dollar is a clear signal that trade wars are negatively impacting the US' privileged position in the global economy.

US Total retail sales rose 1.4% in March, beating the expected 1.3% after rising 0.2% a month earlier. On an annualised basis, sales rose 4.4%, the fastest pace since December 2023, which contrasted with the slowdown in inflation to 2.4%.

In the week ahead, trade tariffs are set to dominate global attention around the clock, though key scheduled events will still remain important. On Wednesday, the US retail sales data is worth watching. The last three reports have come in.

We break down one of the most dramatic weeks in the markets — including a record-breaking S&P500 surge, the dollar index slipping below a critical 3-year support line, and gold closing the week at all-time highs.

The US dollar is suffering due to weaker than expected inflation data and a surge in Americans' inflation expectations.

The dollar index returned to the lows of September last year after a brief surge at the start of the week. The rebound of the US currency was only sufficient to close the gap created by the announcement of tariffs..

This week saw one of the most epic reversals in the US indices. On Wednesday, the S&P500 added about 9.5% for the day, posting the third largest gain in its 75-year history and rebounding nine-tenths of the decline caused by.

The selling pressure on the US dollar is due to the sell-off in equities and long-term bonds. The current situation is reminiscent of the uncertainty seen in March 2020.

Sentiment in financial markets is at a five-year low, with the Fear and Greed Index falling to 3. Waiting for a reversal in sentiment and a change in politicians' rhetoric can be more reliable indicators for investors.

Gold experienced a significant increase followed by a sharp decline. It may be a good time for bulls to take profits. Oil faced challenges from the macro economy, with OPEC+ ramping up production and oil breaking through a three-year range.