Markets are experiencing a vibrant end to the week, particularly for those who have invested in gold. Over the past four days, gold has surged, reaching a new all-time high, surpassing $2700. This rally reflects strong and consistent buyer interest, as any declines in prices have been promptly met with bids, despite improved investor sentiment in Chinese equities. Notably, the MSCI China Index rose 4.4% today. The positive momentum in China has initiated a significant reversal in the US dollar, negating most of the appreciation observed following yesterday's retail sales data.

The prevailing market sentiment suggests that China’s economic recovery might bolster European and global growth, potentially reducing the disparity with the US economy. This optimistic outlook is also being fueled by a general anticipation of growth in the year 2025, as indicated by encouraging signals from equity markets. In the foreign exchange space, the euro has rebounded from a recent two-month low, gaining 33 pips to reach 1.0864. This movement is partly driven by market speculation of a potential 50 basis point interest rate cut by December, a possibility bookmakers currently rate at 23%. This expectation is being supported by recent declines in oil prices, which could help keep inflation rates low.

Meanwhile, the British pound has risen again above 1.30 but encountered resistance near 1.3075, forming a minor double top that will be closely watched in the upcoming trading week. It last traded at 1.3042. In contrast to the prevailing upbeat trend, the Canadian dollar has underperformed. This has largely been influenced by developments in the oil market, though attention is also focused on next week’s Bank of Canada interest rate decision. Market participants are pricing in a high probability of a 50 basis point rate cut, with the odds increasing to 93%.