Following the news from Iran, the markets experienced an aggressive sell-off. Strong releases of Job Openings and the ADP Non-Farm Employment Change increased pressure on riskier assets, contributing to the U.S. Dollar’s resurgence. Additionally, negative domestic developments in the U.S., such as the dock workers’ strike, have raised concerns about potential disruptions to the supply chain, according to FOMC member Goolsbee. As a result, a market correction became inevitable for both U.S. stock markets and cryptocurrencies.
In Europe, geopolitical tensions had a more limited impact on the markets. Attention was focused on the latest Eurozone CPI and Unemployment Rate data. The unemployment rate remained unchanged at 6.4%, while inflation dropped to 1.8%, marking the first time it has fallen below 2.0% since 2021.
In Asia, Chinese markets are closed for the National Day holiday until the weekend. In Japan, markets have shown a slightly negative reaction since last Friday, following the selection of the new prime minister.
Gold recovered its losses from Friday and Monday but has been unable to reach a new all-time high despite the Iran-Israel tension. The $2,700 level remains a strong resistance for gold. Similarly, silver has been weak, following gold’s corrective movements. However, it began to rise on Tuesday, breaking through the $32 level on Wednesday. If silver breaks the $32.50 resistance, the next target will be the $36 zone by the end of the year, with a potential stretch toward $40 depending on gold’s trajectory and further U.S. rate cuts into 2024.”
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