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Gold

·      Gold is down for the week.

·      Last Friday, it closed at $1898.23. Heading into the close, the price is $1892.50.

·      Gold, like crude oil, is closing near unchanged/lower on the week, despite midweek spikes in response to Russia’s invasion of Ukraine.

·      In yesterday’s trading, the price reached a high of $1974.40. This increased the price to its highest level since September 2020.

·      After reaching that high, the price settled at $1902.94 yesterday.

·      The current exchange rate is $1892.50. The price was $1898.23 a week ago on Friday.

·      The price of gold, like the price of crude oil, is a buy the rumour, sell the news scenario (with a failed break higher in between).

Food Prices

• Food prices have reached multi-year highs, and central banks are powerless to intervene.
• People will spend more money on food and less on durable goods and services, lowering their standard of living.
• Wheat futures on the CBOE are up 16% since the start of the week, the biggest gain since the 2012 harvest. The price level reached its highest level since April 2008, as traders assessed the impact of the conflict between two of the world’s largest exporters of wheat, corn, and other agricultural products. In January, the FAO’s Food Price Index was close to its 2011 peak (in nominal terms) and one step below its 1974 peak, which occurred during a period of stagflation and the aftermath of the oil crisis.
• Furthermore, the recent increase in grain prices suggests that these highs will be surpassed in February.
• It means that people will spend more on food and less on long-lasting goods and services, lowering their standard of living.
• Such price increases are a source of concern for central banks all over the world. They may be forced to turn a blind eye to inflation in order to avoid further stressing the economy and consumer demand. High inflation may no longer be a reason to buy the euro and the pound against the dollar on the forex market, as it does not increase the likelihood of the central bank tightening policy in the coming months.
•  When currencies fall in value, investors may sell local bonds in response to falling real yields, causing a reversal.

US

To end the week, US stocks posted back-to-back gains.

S&P and Nasdaq end the week higher.

Dow has its best day since 2022 The major indices have had back-to-back gains, with the Dow leading the way and posting its best day since 2022. The gains come despite the risk of more unrest in Ukraine as Russia surrounds Kyiv, the country’s capital.

The US stock indices added another positive performance, with the Dow dominating with its biggest day in 2022. The Dow gained 834 points, or 2.51%, on the day. The Nasdaq was the worst performer, but it still added 1.64 percent after gaining 3.35 percent the day before. The S&P 500 gained 95.95 points, or 2.24 percent.

European stocks also close sharply higher, with major indices gaining 3.5 percent or more.

The Nasdaq, S&P 500, and Russell 2000 all closed higher for the week (by 0.8 percent, 1.07 percent, and 1.58 percent, respectively), but the Dow closed unchanged and European stocks fell.

Nonetheless, given the increased risk of a Russian takeover of Ukraine, today’s gains were impressive (with a new puppet government put in charge). 

There were reports that Russia would be willing to meet with Ukraine, which may have squeezed shorts and pushed the underinvested to invest more, but it could be a different storey next week if meetings with NATO nations imposed more sanctions on Russia, and the US and Europe announced sanctions against Putin, freezing his personal assets.

Forex

• The EURUSD is closing near the highs of the day at 1.1270. The pair is also testing the 100-hour moving average at 1.12726. (and moving lower). The pair has nearly retraced all of the declines that occurred following the Russian invasion (1.1285ish). Traders will be looking toward the 1.1300 and the 200 hour MA at 1.1315 if the price moves back above the 100 hour MA.
• On Friday, the GBPUSD consolidated in up and down trading, closing at 1.3412. The 38.2 percent of the move down from the high of February 18 is 1.13134. That could be a barometer for buyers and sellers the following week.
• The USDJPY fell and then rose on Friday. The low stalled right at the 200 hour MA of 115.14 and bounced back to and through Thursday’s week high of 115.685 to a new week high of 115.75 before settling back down at 115.53. Watch 115.368 for help early next week. That represents half of the range since the high on February 10th. If we move below, we could be back at the 200 hour MA.
• The NZDUSD rose today, trading above the 100 hour moving average at 0.6729 for the majority of the NA session. At the start of the week, that level will be a bias defining level. Staying above the trend line is more bullish. If we move lower, we should see more downside probing. The price has stabilised at 0.6745.
• AUDUSD. The AUDUSD also reclaimed its 100-hour moving average (MA) of 0.7205, which it maintained throughout the North American session on Friday. Corn futures were down at $6.59 today after trading up to the limit during parts of yesterday at $7.189. (-8.39 percent from the high yesterday)