Subdued start to the week for Asian markets

Monday, July 07, 2014

Asian stocks got off to a tentative start to the week as benchmark indices in the region pared recent gains and pulled back off multi-year highs on profit taking. After a bumper session for data on Thursday which saw global risk appetite increase, the closure of US markets on Friday saw trading levels drop significantly.  Markets across Japan and China drifted sideways to lower throughout the overnight session with the yen pushing above 102.00 as the dollar strengthened.

Spot gold prices slipped lower overnight; however, prices were still able to find support above $1,313/oz. Recent weeks have seen the yellow metal consolidate sideways throughout the end of June and beginning of July with support levels towards $1,310/oz holding up relatively well. Prices have pulled back in recent sessions as equity market rally higher and with the dollar index on track to post gains for the fifth straight session, building on support offered by the 200 day MA and rising above 80.330; further declines in spot gold prices could be seen in the coming sessions.

Despite the tentative start to the week in Asian markets, investors will be switching focus to US corporate earnings as optimism regarding US economic growth pushes higher. Alcoa is set to kick of proceedings on Tuesday with their Q2 earnings conference call which investors are hoping will surprise on the upside much like the majority of Q1 corporate earnings which were markedly better than expected even in the face of significant weather related headwinds.

DXY strengthens on US economic outlook 

DXY Curncy DOLLAR INDEX SPOT 2014 07 07 07 56 06 

Spot gold prices pull back from recent high on growing risk appetite

XAU Curncy Gold Spot Oz 2014 07 07 07 42 11

Events for today

0600

JP

May

Leading Index

0600

JP

May

Consumer Confidence

0700

DE

May

Industrial Output

0930

EZ

Jul

Sentiment Index

1500

US

Jun

Employment Trends

 

 

Topics: Gold, DXY
More from: Kash Kamal