GOLD PRICE SOARS AS INVESTORS RUSH TO INFLATION HEDGES

US stocks wavered on Monday as investors continued to worry about inflation and the potential for Fed tightening. The Dow Jones rose by 13 points while the S&P 500 and Nasdaq 100 indices declined slightly. Among the top movers were Royal Dutch Shell, Oatly, and Tesla. Shell shares rose after the company said that it will change its structure and move its tax base to the UK. Government officials in the Netherlands have launched a bid to keep the company in the country.

Oatly shares crashed by more than 22% after the company warned about growth. Tesla shares crashed by more than 4% as Elon Musk continued to offload his stake in the company. The other top stocks to watch this week will be retailers like Walmart, Target, and Costco that will publish their earnings. Nvidia, the biggest chip company in the world will also publish its results.

The US dollar strengthened in the overnight session as investors waited for the upcoming retail sales data. The numbers, which will come out in the afternoon session, are expected to show that the overall retail sales held steady in October even as prices surged. The headline sales are expected to have risen by 1.2% on a month-on-month basis. Core retail sales are expected to have risen by 1.0% in October. Other key American numbers that will come out are industrial and manufacturing production and export and import price index.

The economic calendar will have some key events today. In the UK, the Office of National Statistics (ONS) will publish the latest employment numbers. These numbers are expected to show that the country’s unemployment rate declined to 4.4% in September. Other important data will be the US GDP numbers. Based on the first GDP estimate, analysts expect that the economy expanded by 3.7% on a year-on-year basis. Christine Lagarde will also deliver a speech that could have an impact on the euro.

BTCUSD

The BTCUSD pair retreated as investors sold the Taproot upgrade news. On the four-hour chart, the pair is still above the ascending trendline that is shown in green. It also seems it is forming a rising wedge, which is usually a bearish sign. The pair is also along with the 25-day moving average. In addition to the rising wedge, the pair has also formed a small head and shoulders pattern. Therefore, the pair will likely break out lower in the near term.

EURUSD

The EURUSD sell-off accelerated in the overnight session after Joe Biden signed the infrastructure package. The pair managed to move to a low of 1.1385. It also moved to the lower side of the Bollinger Bands. Also, it has dropped below the 25-day and 50-day moving averages while the MACD has continued falling. While the pair will likely keep falling, there is a possibility that it will have a relief rally in the near term.

XAUUSD

The XAUUSD pair rallied to the highest level since June as demand for gold rose. This action was mostly because of the rising demand for inflation hedges. On the daily chart, it has moved above the key resistance at 1,835. It is also above the 25-day moving average while the RSI has also risen. Therefore, the pair will likely keep rising as bulls target the resistance at 1.1900.