Yahoo Finanza US Protests Add to Market Uncertainty
The outbreak of violence stateside adds another layer of uncertainty to global investors who are already contending with the risk of heightening US-China tensions. These downside risks are preventing riskier assets from going off on a rally, as investors curtail their optimism that the worst of the global pandemic is now behind us.
Asian stock and currency markets are a sea of green on Monday, while Dow futures erased earlier losses in a sign of resilient risk appetite. The gains in Asian equities were led by Hong Kong’s Hang Seng index, which climbed 2.5 percent at the open after US President Donald Trump stopped short of imposing fresh sanctions over China.
Gold keeps upward trend intact
However, there remains a prevailing sense of caution, with Gold sticking to its upward trend, having registered higher highs and higher lows on the hourly charts since May 27. However, Bullion’s advance is being resisted for the time being at the $1740 psychological line, as was the case on May 22. However, should the upward momentum continue, driven by risk aversion, then a meaningful breach above $1740 appears inevitable with a path towards $1765 then in its sights.
Oil traders await OPEC+ meeting
Another major commodity is also showing a tinge of restraint, with Brent Oil hovering around the mid-$37 range at the time of writing. Brent futures are holding on to most of their 33.66 percent gain in May, its first monthly advance so far this year, as investors assess the next direction for Oil prices.
Should the US protests persist and serve as a drag on economic activity, that could weigh on demand for the commodity. However, with more of the world reopening, coupled with reports that OPEC+ could move its meeting earlier to June 4 and extend their production cuts, such factors could translate into more lift for Oil prices.
Until there is some much-needed clarity, investor sentiment is expected to continue blowing hot and cold, which is lending to the current contrasts across the various asset classes.
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This article was originally posted on FX Empire
