Gold has outperformed both stocks and bonds since the turn of the century. Gold was among the best-performing assets of 2023. According to analysis by the World Gold Council, gold outperformed emerging market stocks, U.S. bonds, the U.S. dollar, global treasuries, and commodities in general. The only asset classes that performed better than gold were U.S. stocks and developed-market foreign stocks.  But if we go back deeper in time to 1999, gold has narrowly outperformed stocks on an annualized basis as well. Dow Jones Commodity Index Gold (DJCI) tracks the gold market using the futures index. Dating back to the turn of the century, the DJCI has produced a 7.8 percent annualized return, according to S&P Dow Jones Indices head of commodities Brian Luke. That compares to a 7 percent return for the S&P500 over the same period. Bonds are even further behind in the race. The iBoxx USD Overall Index, measuring the performance of government and corporate bonds, has charted an average return of 4.1 percent since 1999. Adjusting for volatility, gold has also demonstrated better risk-adjusted returns than stocks in the 21st century, with a Sharpe ratio of 0.48 versus 0.45 for equities. The DJCI reached an all-time high in December, charting a 12.8 percent return. That outpaced both bonds and the broader commodity markets. Equity markets won 2023 with a 26.3 percent return for the S&P500. Gold charted a strong performance in 2023 despite significant headwinds, including a strong dollar and rising interest rates. Gold is a non-yielding asset. It doesn't pay dividends like many stocks, and it doesn't produce interest income like bonds. That means there is a higher opportunity cost when holding gold in a higher interest rate environment. This is often cited as a knock on the yellow metal, and it certainly impacted gold's performance through the first three quarters of 2023. Nevertheless, gold has proven to be a strong addition to an investment portfolio through the 21st century. Luke noted that central banks have taken notice of gold's performance over the long haul. Total central bank gold buying in 2022 came in at 1,136 tons. It was the highest level of net purchases on record dating back to 1950, including since the suspension of dollar convertibility into gold in 1971. That buying spree continued into 2023 with central banks adding another 800-plus tons of gold to their reserves through November of last year. Gold has historically provided investors an alternative to fiat currency," Luke wrote. "Digging into the central bank purchase data, countries including Russia and China have led the increase in central bank holdings. Foreign central banks appear to increasingly value gold's hedge against inflation, debt default and dollarization.

Gold price consolidates around $2,030, as traders await US inflation data for fresh direction.  The US Dollar pauses Tuesday's turnaround amid sluggish US Treasury bond yields and risk-aversion. Gold price ranges between 21-day SMA and 50-day SMA as bearish RSI counters Bull Cross.   Gold price is replicating the recovery move seen in Tuesday's Asian trading early Wednesday, as broad risk-aversion underpins the traditional safe-haven. Geopolitical risks keep Gold price afloat  Simmering geopolitical tensions in the Middle East and increased cautiousness ahead of Thursday's US inflation report keep investors away from riskier assets, scurrying for safety in the Gold price, as the US Dollar struggles to capitalize on the downbeat mood. The US Treasury bond yields also stay directionless, with the benchmark 10-year bond yields at around the 4.0% level. Iran-backed Houthi militants launched the largest attack to date on commercial merchant vessels, CNBC News reported on Tuesday, citing a senior US Defense Department official. Further, investors call for prudence, as markets keenly await the critical US Consumer Price Index (CPI) data on Thursday to gauge the pace and timings of the US Federal Reserve (Fed) interest rate cuts later this year. The current market positioning suggests a 62% chance of a rate cut by the Fed in March, according to the CME Group's FedWatch tool. The US CPI is expected to rise at an annual pace of 3.2% in December, up slightly from a 3.1% increase in November. The Core CPI inflation is set to decline to 3.8% YoY in the reported period versus 4.0% in November. The US Dollar (USD) came under renewed selling pressure at the start of the week on Monday after the New York Fed's latest Survey of Consumer Expectations showed Tuesday that US consumers' projection of inflation over the short run fell to the lowest level in nearly three years in December. However, the US Dollar regained upside traction on Tuesday, as uncertainty before the US government shutdown and the fourth-quarter earnings reports fuelled a flight to safety in American trading. Looking ahead, Gold price is likely to extend its range trade, in the absence of top-tier US economic data and pre-CPI data nervousness. But Gold traders could find fresh impetus from the sentiment on Wall Street and Fedspeak. In case risk-aversion intensifies, the Gold price rebound could be checked by the resurgent safe-haven demand for the US Dollar. Conversely, dovish Fed expectations could keep the downside cushioned in Gold price. Gold price technical analysis: Daily chart Gold price is likely to maintain its side-ways momentum so long as it remains confined between the 21-day Simple Moving Average (SMA) and 50-day SMA at $2,045 and $2,015 respectively. The 14-day Relative Strength Index (RSI) indicator sitting just beneath the midline, restricting Gold buyers while they continue to find support from the Bull Cross confirmed last Friday.. The 100-day SMA closed above the 200-day SMA on Friday, confirming the bullish crossover. If the rebound sustains, the immediate resistance is seen at the 21-day SMA at $2,045. The next bullish target for Gold price is envisioned at Friday's high of $2,054, above which doors reopen for a test of the $2,100 barrier. On the downside, the initial support is seen at the $2,015 confluence, where the 50-day SMA and Monday's low coincide. A daily closing below the latter is critical to resuming the downtrend toward the $2,000 mark.

AUD/USD lost the 0.6700 mark on Tuesday. A deeper pullback could see the 200-day SMA revisited. Investors' focus shifts to key inflation data on Wednesday. The decent rebound in the greenback put the broader risk-associated universe under extra downside pressure on turnaround Tuesday, exposing the Aussie dollar to extra weakness. Against that backdrop, AUD/USD broke below the key 0.6700 contention zone and seems to have paved the way for another potential test of the support region near 0.6650, or yearly lows. In the meantime, cautious trade is expected to emerge around AUD ahead of the publication of key inflation readings gauged by the Monthly CPI Indicator by the RBA. So far, consensus points to another soft print from domestic inflation, which should in turn support the idea of a pause by the RBA in a context where the central bank has not ruled out extra interest rate hikes. Sport also derived further selling pressure from another poor session in the commodity galaxy, where copper prices and iron ore extended their negative activity, while the absence of inspiring news from China is expected to keep the Australian currency under scrutiny. A quick look at the domestic calendar saw flash Building Permits expanding at a monthly 1.6% in November, while preliminary readings showed Retail Sales increasing by 2.0% in November vs. the previous month. AUD/USD daily chart AUD/USD short-term technical outlook Further AUD/USD weakness might reach the 2024 low of 0.6640 (January 5) before the critical 200-day SMA at 0.6582. Down from here is the December 2023 low of 0.6525 prior to the interim 100-day SMA at 0.6500. If bulls recover control, the focus will transfer to the December 2023 high of 0.6871 (December 28), which will appear before the July 2023 top of 0.6894 (July 14) and the June peak of 0.6899 (June 16). If the pair breaks out of this range, the psychological 0.7000 level will be the next to watch. According to the 4-hour chart, the significant conflict zone is around 0.6650. If this zone is breached, there are no noteworthy disagreement levels until 0.6525 and 0.6452. The MACD sank to the negative zone, while the RSI trading below 50 all seem to point to further losses in the short-term horizon. The bullish trend, on the other hand, may encounter first resistance at the 55-SMA at 0.6766, which is seen as the last line of defence before the previous high at 0.6870. View Live Chart for the AUD/USD

MARKETS With fingers tapping nervously amid the calm before the profit storm and uncertainties centred around the upcoming US CPI data, U.S. stock markets showed a mixed performance overnight, with the S&P 500 and Dow Jones Industrial Average experiencing losses as the Nasdaq Composite recorded marginal gains. At the same time, broader markets remain tied to the hip of the 10-year Treasury yield amid growing concerns the bullish narrative may flip, questioning whether bets on Federal Reserve rate cuts are overdone. We should have a more conclusive read on that after Thursday's US CPI data. After a recent stock market dip, attention gradually shifts to the upcoming earnings season to gain insights into companies' growth trajectories. Mega-cap technology firms, part of the Magnificent 7 group, are under close scrutiny due to their significant influence and substantial weight in the S&P 500. Their earnings outcomes will be crucial in determining the stock market's overall direction. Investors are keen to discern whether recent declines are justified or whether companies' profits remain robust enough to revive the end-of-year rally. The impact of the Federal Reserve's rate hike policy, cautious consumer behaviour, macro uncertainty, and signs of economic contraction in Q4 have raised concerns about the forthcoming fourth-quarter corporate earnings season. High valuations and thoughts of a broader economic slowdown may cast a shadow on corporate earnings, even if profits exceed expectations—a situation that stock market operators likely aim to avoid. OIL MARKETS Brent crude settled around $78 per barrel, and traders are assessing factors such as disruptions in the Red Sea, a critical shipping lane, and an unexpected decrease in Russian seaborne exports amid weakening demand. Seaborne tracking data indicates that Russia has reduced exports by 500,000 barrels, aligning with quotas and demonstrating a notable level of compliance from Russia, which has triggered a short-covering rally. However, few believe Russia will remain compliant when they need Petrol revenue to fight the war.  

XAU/USD Current price: 2,030.25 Investors hope easing inflation readings could help the Fed decide a rate cut. US Treasury yields tick north ahead of the US Consumer Price Index release. XAU/USD gains bearish traction amid renewed US Dollar demand, remains neutral. Spot gold keeps trading within familiar levels, with XAU/USD staying at the lower end of Monday's range. The US Dollar gathered momentum after Wall Street's opening as stocks edged sharply lower, reflecting a dismal market mood, although gains are restricted ahead of key macroeconomic figures. Market players hope the United States Federal Reserve (Fed) will soon start trimming interest rates, but await for the Consumer Price Index (CPI) figures to be out next Thursday to further support such a view. Over the past week, American employment-related data indicated the labor sector remains relatively tight, which may end up pushing inflation higher, undermining the Fed's tightening policy. At the same time, the pair has pushed rates to multi-year highs, which risks a major economic setback. The central bank is at a point where hiking rates seems a major risk for economic progress compared to the benefits it may bring in taming price pressures. That's why inflation-related data is so relevant this week. If the CPI eases more than anticipated, the figures will somehow "confirm" that the Fed will proceed with rate cuts. At the time, speculative interest believes there's a good chance for a cut as soon as March. Meanwhile, US Treasury yields advance, supporting USD advance. The benchmark 10-year yield stands above 4%, while the 2-year note offers  4.37%. XAU/USD short-term technical outlook XAU/USD trades around $2,030, retreating from an intraday high of $2042.09. Technical readings in the daily chart show that the risk skews to the downside, with the pair developing below a directionless 20 Simple Moving Average (SMA). Meanwhile, the 100 and 200 SMAs converge around $1,962, providing long-term dynamic support. Finally, technical indicators turned marginally lower but remain within neutral levels without enough directional strength to confirm another leg south. In the near term, however, and according to the 4-hour chart, bears are in control. The pair trades below all its moving averages while technical indicators gain downward traction below their midlines. The 20 SMA gains downward traction between the longer ones, providing near-term resistance at around $2,036. Support levels: 2,016.60 1,998.65 1,987.20 Resistance levels: 2,036.00 2,052.30 2,065.45

EUR/USD Current price: 1.0933 The focus remains on the United States Consumer Price Index. Mixed European data undermines demand for the Euro. EUR/USD is bearish in the near term, support at 1.0920. The EUR/USD pair trades with a soft tone on Tuesday, hovering around 1.0930. The pair trades within a well-limited range since the week started as market participants await fresh inflation data from the United States (US). The country will publish the December Consumer Price Index (CPI) next Thursday, foreseen at 3.2% YoY. Investors believe there is roughly a 60% chance the Federal Reserve (Fed) will proceed with a rate cut as soon as next March, despite the Fed repeatedly stating upcoming decisions will be data-dependant. Meanwhile, the US Dollar benefits from firmer US Treasury yields. The 10-year note offers 4.04%, up 4 basis points (bps) ahead of the opening and not far from last week's peak of 4.10%. At the time being, the 2-year note yields 4.38%. Stock markets, on the other hand, trade with a sour tone, with European indexes trading in the red and dragging US futures alongside. Data-wise, European figures were mixed. On the one hand, German Industrial Production fell by 0.7% MoM in November, worse than anticipated. On the other hand, the Eurozone Unemployment Rate contracted to 6.4%. As for the US, the country released the NFIB Business Optimism Index, up in December to 91.9, better than anticipated. The country will later publish the November Goods and Services Trade Balance and January TIPP Economic Optimism. EUR/USD short-term technical outlook Technically, there has been no progress. The daily chart for EUR/USD offers a neutral-to-bearish stance, as the pair keeps meeting sellers around a bullish 20 Simple Moving Average (SMA) at around 1.0970, the immediate resistance area. At the same time, the longer moving averages remain lifeless far below the current level, while technical indicators turned lower within neutral levels, lacking enough strength to support a leg lower. In the near term, however, the risk of a downward extension is higher. The 4-hour chart shows the pair is developing below its 20 and 100 SMAs while facing immediate support around a flat 200 SMA at 1.0920. Finally, the Momentum indicator hovers directionlessly around its midline, while the Relative Strength Index (RSI) indicator gains downward traction at 43, reflecting persistent selling interest. Support levels: 1.0920 1.0885 1.0840   Resistance levels: 1.0970 1.1015 1.1060