Gold , ASX 200 Analysis: Morning brief - 29th May 2023

Market summary

Wall Street posted strong gains on Friday on reports that a debt-deal agreement was within sight
Both President Biden and Republican House speaker McCarthy predicting on Sunday that the majority of their respective parties will back the deal
But, time is still running short to get the deal over the line with Janet Yellen warning that cash will run out by June 5^th
The Nasdaq rallied from the open to reach a 13-month high and close the downside gap from April 2022, whilst the S&P 500 probed the prior week’s (YTD) high but remains just beneath the August 202 downside gap
The US dollar rose for a third week and against all other FX majors, USD/JPY hit a fresh YTD high and slightly extend those gains in early Monday trade
NZD was the weakest FX major following the RBNZ’s dovish 25bp hike, and bearish engulfing candles formed on all three commodity FX pairs (NZD, AUD and CAD)Risk-on trade helped oil prices recoup around half of Thursday’s losses, AUD/JPY rise to a 3-day high (and extend gains in early Asia
~75% of economists polled by Reuters expect the BOJ to retain YCC control until at least next year, as bets the central bank will leave ultra-dovish policies subside
Turkey’s President Erdogan sealed his victory in the election to begin his third decade in power
No major economic data is scheduled for today
Public holiday in Switzerland, UK and the US

View The Week Ahead for upcoming events and themes for this week

ASX 200 at a glance:

Worst week in ten for the ASX 200
8 of the 11 sectors were lower last week, led by materials and consumer discretionary
Yet the lows held above the 200-day MA
The ASX 200 is expected to open above 7200 thanks to Friday’s risk-on rally on Wall Street
We're now looking for a retest (and potential break above) 7300

Gold daily chart:

The lure for gold has dwindled since the US dollar regained its strength and odds of a debt-ceiling deal became more apparent. And we see the potential for further losses, but gold has reached a potential inflection point over the near-term. Prices are holding above the 1934.4 low and November trendline, and as Friday printed an inverted hammer then we’re on guard for a corrective bounce from current levels. At which point we’ll then look for evidence of a swing high and potential break of the 1934 area. Otherwise, a break beneath 1934 assumes bearish continuation.

Asia Data Calendar (AEDT):

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.