The EUR/USD pair rebounded as much as 0.7% last night, before retracing back to the 1.058 area this morning, following European Central Bank president Mario Draghi’s hawkish speech.

Mr Draghi declared victory against deflation and the ECB no longer had a sense of urgency to take further actions to drive monetary stimulus, hinting that the tapering might start soon. As expected, the ECB decided to keep interest rates at record lows.

Tonight, the US non-farm payroll numbers are due, revealing the last piece of the puzzle which will determine the Federal’s rate-hike decision next week. Market anticipates 190k non-farm jobs were added last month, according to Thomson Reuters consensus estimates. The recent ADP non-farm data came out to be a big positive surprise, which fuelled even higher expectations for tonight's numbers.

Gold, silver and crude oil prices slide further last night, partially due to a stronger US dollar. The gold price is now testing the psychological support level at US$1,200 and its next technical support level could be found at around US$1,193.

The recent slump in precious metal prices reflected both expectations for tightening monetary cycle and rising yields. However, persisting political uncertainties under Donald Trump’s administration and rising populism in the upcoming European elections may be a catalyst demand for safety again.

Gold - Cash

 

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