Weekly Outlook: Volatile markets eye gold as uncertainty looms

October 27, 2024 (MLN): The financial market will be watching Iran's reaction to the Israeli raid on Saturday, which Israel claims was finished.

However, this might not be sufficient to stabilise the world financial market. 

The mood and assessment of investors will give some clues as to the next course of action when the market opens on Monday.

The key question is whether or not the Middle East is on the verge of a full scale conflict or further escalation. 

Investors typically flock to safe haven assets like US bonds and gold in these kinds of uncertain times. Swiss francs and Japanese Yen are highly sought after currencies. It is anticipated that oil prices will also rise. 

And in such a scenario, the economies that rely heavily on oil could suffer greatly from any disruption or reduction in supplies. In such circumstances developing economies are particularly affected. 

Since US Dollars are regarded as a safe haven asset, foreign institutional investors may choose to purchase them, which might put pressure on the stock market elsewhere.

Now, let's return to economic activity. The key economic event this Friday will be the US jobs data. The JOLTS Job Openings data will be made public on Tuesday.

On Wednesday, ADP Employment data will be released, followed by US Pending Home Sales and Advance Q3 GDP. Weekly unemployment claims, US Core PCE, Personal Income and Spending, and ISM Manufacturing PMI will all be released on Friday. 

The market is expected to remain volatile, and gold may be a major mover. But if the conditions hold steady, it may eventually settle down.

#GOLD @ $ 2747- The key levels on the upside in $ 2762-68. Break risks for $ 2787-90 or $ 2805. While on the downside, break of $ 2718 risk for test and break of $ 2698-00.

#EURO @ 1.0793- Euro is expected to hold 1.0850-60 for a dip towards 1.0710-20. Break will encourage for 1.0660. Or else 1.0880.

#GBP @ 1.2959- Pound Sterling could struggle to move up unless it breaks 1.3050. However, a clear break of 1.2880 will encourage for 1.2840. Or else 1.3080.

#JPY@ 152.30- Volatility is expected. But risk is if USD fails to clear 153.60-80, $ could dip to test 150.50. Break will encourage for 149.20. Or r we law 154.20.

The writer is the former Country Treasurer of Chase Manhattan Bank

Disclaimer: The views and analysis in this article are the opinions of the author and are for informational purposes only. It is not intended to be financial or investment advice and should not be the basis for making financial decisions.