Daily Market Lookup

• Most Asian currencies edged lower on Monday after sharp gains in the previous session, spurred by Federal Reserve Chair Jerome Powell signaling an interest rate cut next month. The US Dollar Index ticked up 0.2% in Asian trading hours, after tumbling nearly 1% to a four-week low on Friday over Powell’s dovish tilt. Asian currencies jumped on Friday following Powell’s dovish remarks at the Jackson Hole symposium, where he acknowledged growing risks to the job market and suggested that the "shifting balance of risks may warrant adjusting our policy stance." This opened the door to a potential rate cut at the Fed’s September 16-17 meeting, with traders now placing over an 85% probability on a quarter-point reduction. The dovish outlook led to a weaker U.S. dollar, which in turn supported Asian currencies on Friday. However, on Monday, investors took a cautious stance, reassessing Powell’s comments and awaiting further economic data before making significant moves. Among other regional currencies, the Indian rupee’s USD/INR was under pressure amid escalating U.S.-India trade tensions. The U.S. is set to impose an additional 25% penalty tariff on Indian goods starting August 27 in response to India’s increased purchases of Russian oil. Indian officials have expressed frustration over the tariffs, stating that trade discussions continue, but India must defend key interests, particularly those of its farmers and small producers.
• Gold’s price dynamics are shaped less by mine supply and more by who is buying, with central bank purchases having an outsized effect, according to Goldman Sachs. Unlike oil or natural gas, gold is not consumed but stored, meaning traditional supply-demand models are inadequate. Instead, the market clears through changes in ownership. These conviction buyers include exchange-traded funds (ETFs), speculators, and, most importantly, central banks. Goldman groups them together because their flows have a similar price impact, even if the underlying motives differ. ETFs, for instance, are highly rate-sensitive and respond gradually to Fed policy shifts, while central banks buy for financial or geopolitical reasons. Goldman’s strategists estimate that “100 tonnes of net purchases by conviction holders – central banks, speculators, and ETFs – corresponds to a 1.7% rise in the gold price.” Opportunistic buyers, such as households in emerging markets, play a supporting role by cushioning moves, but they do not drive the trend. This helps explain why central bank buying often moves gold by more than investors might expect. Unlike other commodities, higher prices do not automatically trigger more supply or curb demand. Mine output is stable and price inelastic, while emerging-market households rarely sell, keeping most of their gold locked away. That means when conviction buyers step in, prices can run far. Thomas emphasizes that “price moves are driven by one ratio: net conviction purchases/mining supply.” With mine production steady, even modest swings in conviction flows account for nearly all month-to-month variation in gold prices. Recent history underlines the point. Central banks shifted from being net sellers to net buyers after the global financial crisis, and purchases accelerated sharply following the 2022 freezing of Russia’s reserves. This fivefold surge in official demand reset the relationship between interest rates and gold prices, as ETF outflows were more than offset by sovereign accumulation. The report also highlights that central bank demand moves in long cycles, driven by financial or geopolitical concerns. Net buying tends to rise when confidence in the reserve system wanes, such as during sanctions or fiscal sustainability worries. When trust is restored, the urgency fades and flows slow. In practical terms, price direction in gold is set by conviction flows relative to limited new mine supply. That is why even modest shifts in central bank buying can have disproportionately large effects on gold.
• Oil prices edged higher on Monday after Ukraine stepped up attacks on Russia, fanning concerns Russian oil supply could be disrupted, while expectations of a cut in U.S. interest rates buoyed the outlook for global growth and fuel demand. Ukraine launched a drone attack on Russia on Sunday, which forced a sharp fall in the capacity of a reactor at one of Russia’s biggest nuclear power plants and sparked a huge blaze at the Ust-Luga fuel export terminal, Russian officials said. In addition, a fire at Russia’s Novoshakhtinsk refinery, caused by a Ukrainian drone attack, was burning for the fourth day on Sunday, the acting governor of the region said. The refinery sells fuel mainly for export and has an annual capacity of 5 million metric tons of oil, or around 100,000 barrels per day. Meanwhile, U.S. Vice President JD Vance said Russia has made "significant concessions" toward a negotiated settlement in its war with Ukraine on Sunday. However, U.S. President Donald Trump also renewed threats on Friday that he would impose sanctions on Russia if there was no progress toward a peaceful settlement in Ukraine in two weeks Investors’ risk appetite has improved after Federal Reserve Chair Jerome Powell on Friday signaled a possible interest rate cut at the U.S. central bank’s meeting next month. "A risk-on tone across markets boosted investor appetite across the commodities complex, aided by renewed supply side issues across energy and metals," ANZ analysts said in a note.

Gold – XAU

Gold on Friday made its intraday high of US$3371.79/oz and low of $3359.67/oz. Gold is up by 0.982% at US$3365.75/oz.

Technicals in Focus:

On the daily charts, gold trades higher than 20DMA (2197). If it drops below this level, it could lead to 2,100. The MACD is currently above the zero line and the histograms are showing an increasing trend, indicating that there may be upward movement in the coming sessions. The RSI is currently at 83.04, which is in the overbought region, suggesting there may be selling pressure in the next 2 to 3 sessions. The Stochastic Oscillator is also in the overbought territory but has given a positive crossover, indicating a bullish stance for intraday trades, but rebound in expected in all the overbought indicators.

Trading Strategy: Sell on Strength

Sell below 3367-3500 keeping stop loss closing above 3500, targeting 3354-3341-3330-3312 and 3300-3288-3278-3267. Buy in between 3354-3211 with risk below 3200 targeting 3367-3380-3390 and 3400-3424-3437-3451.

Silver - XAG

Silver on Friday its intraday high of US$39.04/oz and low of US$37.51/oz settle up by up by 1.912% at US$38.83 /oz.

Technicals in Focus:

On daily charts, silver is sustaining above 20MA (25.05), breakage above will lead to 23.73. MACD is below the zero line and histograms are increasing trend, bringing a bullish stance in the upcoming sessions. RSI is in the oversold region, indicating a sell signal for now. The Stochastic Oscillator is in the overbought region and gives a positive crossover to show an upside move for the intraday trade.

Trading Strategy: Buy on Dips

Buy in between 37.80-33.10, targeting 38.10-38.90-39.50 and 39.90-40.50-41.10 with stop loss should be placed on the breakage below 33.00. Sell in between 38.5-43.00 with a stop loss above 43.00 targeting 37.80-37.20-36.30 and 35.60-35.30-34.70-34.05.

Oil - WTI

Crude Oil on Friday high of US$63.56/bbl, an intraday low of US$63.18/bbl, and settled up by 0.412% to close at US$63.59/bbl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 75.37, a support level, and breakage above will call for 77.48. MACD is above the zero line and histograms are in increasing mode will bring a bullish stance in the upcoming sessions. The Stochastic Oscillator is in the overbought region, giving a negative crossover to confirm a bearish stance; while the RSI is in the neutral region, more upside can be expected to reach the overbought region, which is highly probable.

Trading Strategy: Neutral to Sell

Sell in between 63.50-72.00 with stop loss at 72.00; targeting 62.70-62.00 and 61.50-60.60-60.05. Buy above 62.70-60.00 with risk daily closing below 60.00, targeting 63.20-64.10-65.40 and 66.20-67.10-67.90.

EUR/USD

EUR/USD on Friday an intraday low of US$1.1582/EUR, a high of US$1.1741/EUR, and settled the day up by 0.997% to close at US$1.1720/EUR.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.0800), which becomes immediate support, a break below will target 1.0717. MACD is above the zero line and histograms are increasing mode, bringing a bullish view. Stochastic is in oversold territory, giving negative crossovers to the bullish outlook for intraday. 14D RSI is currently in a neutral region and giving no directions to consider right now.

Trading Strategy: Neutral to Sell

Sell below 1.1710-1.1990, targeting 1.1640-1.1590-1.1545 and 1.1500-1.1470-1.1420-1.1390 with stop-loss at daily closing above 1.1990. Buy above 1.1575-1.1110 with risk below 1.1100 targeting 1.1640-1.1690-1.1755-1.1790 and 1.1850-1.1890.

GBP/USD

GBP/USD on Friday low of US$1.3389/GBP, a high of US$1.3543/GBP, and settled the day up 0.901% to close at US$1.3525/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 50DMA (1.2674) is becoming a support level. 14-D RSI is currently in a neutral region and direction is difficult to predict on an RSI basis. The Stochastic Oscillator is in oversold territory and gives a positive crossover to confirm a bullish stance. MACD is above the zero line, but histograms are increasing leading to movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; buy in between 1.3470-1.3040 with a target of 1.3430-1.3470-1.3550 and 1.3600-1.3625-1.3680-1.3720 with a stop loss closing below 1.3040. Sell in between 1.3550-1.3850 with targets at 1.3370-1.3310-1.3260 and 1.3200-1.3160-1.3135 with a stop loss of 1.3850.

USD/JPY

USD/JPY on Friday an intra‐day low of JPY146.56/USD an intraday high of 148.77/USD, and settled the day down by 0.954% at JPY146.93 /USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (152.35), major support on the daily chart. 14-D RSI is currently in the overbought region and chances of downward are expected based on RSI. MACD is above the zero line but histograms are decreasing mode which might lead to downward movement. The Stochastic Oscillator is in overbought territory and signaling to sell as it has given a negative crossover to confirm a bearish stance.

Trading Strategy: Neutral to Sell

Sell below 148.00-154.00 with risk above 154.00 targeting 147.40 and 146.60-146.10-145.20-144.70. Long positions above 147.10-144.00 with targets of 148.10-148.70-149.35 and 149.90-150.50-151.20-151.60 with stops below 144.00.