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Strong reaction of precious metals to weaker USD

The markets are having second wind now, with plenty of price dynamics. It started with CAD appreciation but it had its local reasons. Then the US dollar started to lose on many more fronts. AUD is preparing to attack the yesterday peak having totally offset the loss caused by RBA minutes released at night.

The euro is also bumping into the upper bound of its bullish corridor against USD, and as we argued earlier today might already eye 1.0830.

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EURUSD was insensitive to 3bp rise of 10year yield in the USA in the morning but is now taking advantage as yields are moving down again (they move similar to inverted TNOTE instrument) source: xStation5

The reaction went wider than only on fx. We find the spike of precious metals prices as worth noting. Some of this is justified fundamentally as Fed speakers are not suggesting that FOMC came closer to showing 4 rate hikes this year instead of 3, as the December (and March) dot chart showed.

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Gold, Silver and Platinum surged together upon a pullback in US yields and USD weakness; source: xStation5

Also worth noting is the quick reversal on European equities. Our hypothesis on what is this cloud that is causing risk off trading right now in one of the next posts. 


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