Gold and US Stocks Rise While Leaving the Dollar Behind


  • The 10 most influential stocks within the NASDAQ rise in pre-market hours. Will the USA100 rebound after recently declining to the previous support level?
  • Chip makers witness the strongest rebound prior to the market open. NVIDIA up 1.68% and AMD +2.48%.
  • Investors watch with caution as Gold rises more than 5% in 5 days. XAUUSD trades $11 below its all-time high.

USA100 – NVIDIA and AMD Witness Strong Rebounds!

The USA100 fell up to 2.75% this week before forming a slight retracement. However, investors are now taking into consideration if the market will now re-enter and increase exposure. The price of the USA100 has risen 0.56% and when looking at individual components in pre-market hours, most stocks are trading considerably higher.

When looking at the 20 stocks with the highest “weight”, only 10% of the stocks are trading lower in pre-market hours.  NVIDIA (+1.68%) and AMD (+2.48%) are currently witnessing the strongest price movement. Particularly NVIDIA impressed investors with epic quarterly results and better-than-expected revenue guidance, thanks to the huge demand for its products due to the AI frenzy.

Today marks the first of two scheduled addresses by US Federal Reserve Chairman Jerome Powell in Congress. Investors are eagerly anticipating updates on forecasts and strategies from the central bank regarding potential interest rate adjustments this year. Earlier this week, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, stated that there's no immediate necessity to adopt a “dovish” stance, citing the stable economy and robust labor market.

The price of USA100 has risen as we approach the Chairman Speech and has been slightly supported by the ADP NFP data. The ADP Employment Change read 9,000 less than previous expectations, which continues to support the picture of a weakening employment sector. As a result, investors are contemplating if the Fed will consider an earlier hike. However, the main employment data will be released at 17:00 (GMT+2) when the US makes public the JOLTS Job Openings. If the vacancies fall short, the USA100 may continue to rise as economists price in a rate cut.

In terms of technical analysis, the price of the USA100 remains at the “neutral” level. The price trades at the 75-Bar EMA and at the 50.00 mark on the RSI. However, if the price maintains momentum, the asset may obtain a “buy” signal. So far today, the Dollar is declining which makes stocks cheaper for foreign investors. However, investors are worried about the rise in Gold prices. Do higher gold prices indicate a low-risk appetite?


XAUUSD – Why Are Investors Rushing to Gold?

Gold continues to obtain further buy signals from indicators and price action. The price of the commodity is trading above VWAP and is seeing high demand when monitoring Delta Statistics and Cumulative data. The only concern for investors is that the price is currently trading at a previous point of collapse.

The decline in the US Dollar Index indicates that investors are looking to mitigate away from the US Dollar. This potentially could be due to the rise in geopolitical tensions and the fact interest rate cuts are getting closer. After the outbreak of clashes between Israel and the Palestinian Hamas movement last year, an ounce of gold has already risen in price by more than 300.0 dollars, and since the likelihood of a resolution to the conflict soon is low, precious metals will continue to attract investor interest as a shelter asset.

Investors will continue monitoring the Dollar weakness, but also await the Non-Farm Payroll Change and Unemployment Rate on Friday. Also, on Friday the UFTC will release the latest week’s data on buying contract and sell contracts.

Michalis Efthymiou

Market Analyst

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