Markets Suddenly "Red": What Happened Before US Data?
Midway through today's Asian session, many markets fell—especially gold, silver, and oil. This movement seemed "strange," even though it usually occurs when markets are tense ahead of tonight's major data release.
The most common reason: traders are reducing their positions before the US data release. If the data is a surprise, prices could jump sharply. So many are choosing to "play it safe" by closing some positions, and the result is a simultaneous price drop.
For gold and silver, the decline was also triggered by profit-taking. Gold is still near its highs around $4,300, so it's understandable that some are selling after several days of gains. Silver is the same: if it was strong yesterday, a small correction can be immediately felt.
Meanwhile, oil is under pressure from the news. There is optimism about Russia-Ukraine peace talks, which has led the market to believe that Russian supplies could become smoother if restrictions or sanctions begin to ease. In a market that already feels "oversupplied," headlines like this can easily depress prices. Oil pressure is intensifying due to weak Chinese economic data. If China slows, the market fears global oil demand won't be strong enough to absorb the increasing supply. So, oil is under "double pressure": potential supply increases, and fears of weakening demand.
Essentially, the market is in defensive mode while awaiting tonight's US data. If US data is strong, commodities could come under further pressure as the dollar and yields tend to strengthen. However, if US data is weak, gold and silver could get a breather, while oil remains sensitive to supply issues and Chinese data. (Asd)
Source: Newsmaker.id
