Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole Economic Policy Symposium in Wyoming is anticipated to clarify interest rate trends, amid a volatile market recovery. Despite recent mixed economic data, including strong retail sales and a weak jobs report, investors are looking to Powell's address to gauge potential rate cuts. The stock market has shown optimism, with the S&P 500 rebounding sharply, but some analysts warn of continued volatility. Powell's comments could either reinforce expectations for rate cuts or temper market enthusiasm.
BITCOIN
Since the SEC opened the door to bitcoin ETFs in January, Wall Street firms have gradually entered the crypto market. Recent second-quarter 13F reports reveal that Goldman Sachs made a significant move, purchasing $418 million in bitcoin ETFs, primarily through BlackRock's iShares Bitcoin Trust. In contrast, Morgan Stanley trimmed its crypto exposure, reducing its position in spot bitcoin ETFs from $270 million to $189 million. Meanwhile, JPMorgan reported minimal crypto exposure. While banks like HSBC, UBS, and Bank of America also hold spot bitcoin ETFs, most of these investments are driven by client demand rather than the banks holding the assets directly.
BTCUSD (Daily). Looking at the bearish projection line, the price is likely to retest the dynamic support level near 53,300. However, Bitcoin has a chance to bounce back to the upper range again around 66,200. We expect the market to be trading within this range.
GOLD
Gold prices surged to an all-time high, reaching $2,500 per ounce, as the US dollar weakened amid rising expectations for a Federal Reserve interest-rate cut in September. This rally was driven by easing inflation data and ongoing geopolitical tensions, especially in the Middle East, increasing demand for safe-haven assets. Traders are now looking ahead to Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole symposium for further guidance on potential rate cuts. Silver and platinum also saw gains last week.
XAUUSD (Daily). 2500 is a strong psychological level, we believe investors are starting to see a direction in the long term. Price has closed above the bullish projection line, but there could be a correction to 2450, a liquidity level in the last 3 months.
OIL
US crude oil futures fell over 1% on Friday due to reports of Qatar urging Iran not to attack Israel during ongoing Gaza cease-fire talks. West Texas Intermediate (WTI) closed down 1.93% at $76.65 per barrel. Despite early fears of Iranian retaliation over the assassination of a Hamas leader, the anticipated aggression has not materialised, leading to a decrease in the geopolitical risk premium. Market sentiment was also impacted by concerns over weakening oil demand in China as OPEC lowered its 2024 forecast.
WTIUSD (Daily). Since April’s high of USD 86 per barrel, the commodity has been trading lower and the bearish projection line suggests the price will touch the lower band at 72.00 before bouncing back.
POUND
The UK economy grew by 0.6% in Q2 2024, matching forecasts and continuing its slow recovery from recession. June’s growth was flat, with declines in the services sector offset by increases in construction and production. On an annual basis, the economy expanded by 0.9%, slightly above expectations. July inflation was 2.2%, supporting further monetary easing. The British pound rose slightly after the GDP report. Growth forecasts for the UK have improved, with the new Labour government planning reforms to boost the economy. The upcoming budget announcement is anticipated to provide more details on fiscal strategies.
GBPUSD (Daily). Sterling pound is one of the currencies that has beaten the US Dollar in the last 2 weeks. We expect it to hit the resistance level at 1.3000, but may correct back to 1.2850 thereafter.
Fullerton Markets Research Team
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