Precious metals remain in focus, with all rising strongly with Platinum, Gold, and Silver breaking to new all-time record highs.
- Eyes are on precious metals today as this asset class continues roaring ahead:
- Trend traders will want to be long of these precious metals. However, it is wise to respect the very high volatility here, especially in Silver, and trade with relatively small position sizes. Do not be surprised if the strong advance suddenly collapses, and following that, the prices may or may not come back strongly.There are supply issues with Silver, and as advanced economies move towards lower interest rates, that tends to boost the prices of precious metals. But these huge rises cannot be explained fundamentally. It may be institutional investors piling in to try or be seen to try to cash in on these rises - a kind of "Santa Claus" rally in precious metals instead of stocks.
- Stock markets have been quietly consolidating with a weak bullish bias, but yesterday saw a more significant, although still small, bullish move. The MSCI World Index reached a new record high price, and the S&P 500 Index has been trading above 6,900 which is easily within sight of its all-time high which it made a few weeks ago. This is likely partly due to the surprisingly strong US preliminary GDP data which came in at an annualized rate of 4.3% when only 3.3% was expected.
- In the Forex market, since today's Tokyo open, the strongest major currency has been the Japanese Yen, and the weakest has been the British Pound, although the market is relatively quite as we approach the Christmas holiday. The USD/CAD currency pair is in focus as it trades at a new 5-month low price. The USD/ZAR currency pair has just made a fresh 3-year low yesterday and is showing bearish short-term price action at the time of writing, so this might be attractive to carry traders looking to benefit from the 6% interest rate South Africa offers. The USD/MXN currency pair is doing similarly.
- Yesterday's release of Canadian GDP data showed a contraction as expected.
- Tomorrow is Christmas Day. Some markets will be closing early today, and almost every major economy's markets will be shut except in Asia and the Middle East. It is a public holiday today in Germany.