technical

·       Gold builds on Wednesday’s rebound and reverts to $5,200 again early Thursday.

Markets have a peculiar habit of mistaking the first punch for the final bell. Yesterday, Asia looked like a trading desk after a margin clerk walked in unannounced. Today, the same screens are glowing green again as if the crisis were merely a technical glitch rather than a geopolitical storm.

Since the rejection from annual highs at the 1.2100 level in late January, the short-term outlook for EUR/USD has been becoming worse and worse. The recent break below the important 200-day SMA also opens up the possibility of further retracements in the near-term horizon.

Spot Gold bounced from its weekly low and trades with modest gains on Wednesday, still confined to the lower end of its weekly range. Despite the Middle East crisis continuing to intensify, financial markets seem to have dropped panic, and speculative interest moves with modest caution.

Sticky domestic inflation and a Reserve Bank of Australia (RBA) that is in no rush to soften its hawkish stance continue to provide an underlying cushion for the Australian Dollar (AUD) for now, keeping the door open to further gains and limiting the downside.

Despite panic taking over financial markets, the usual safe-haven metals are getting ignored. The US Dollar, on the other hand, became the shining star of the board, recovering its refuge status after long missing it. What happened?