XAUUSD (Gold) Retreats from All-Time High | Asian Market Drop

 Spot gold fell 0.7% to $2,427.25 an ounce, retreating from its recent all-time high. This decline comes amid speculation that the recent surge in gold prices may have been excessive. Key support levels for gold today are $2,445, $2,420, and $2,400.

Asian Markets and Currencies Under Pressure

Asian equities and currencies declined as economic and geopolitical risks overshadowed optimism about potential interest-rate cuts. The MSCI Asia Pacific Index is on track for its biggest weekly drop in three months, with significant losses in South Korea and Hong Kong. Chinese stocks fluctuated as the Third Plenum failed to reassure investors about new growth initiatives for the economy. US futures edged higher following a 0.8% drop in the S&P 500 on Thursday.

Currency Movements and Semiconductor Concerns

Asian currencies weakened against the US dollar amid the equities selloff, with the Taiwanese dollar hitting its lowest level in over eight years. The decline in chip stocks persisted in Asia due to concerns over potential new US restrictions on sales to China. Taiwan Semiconductor Manufacturing Co. shares fell for the third consecutive day.

Market Reactions to Economic Data and Fed Signals

Treasury yields increased slightly after the 10-year yield rose by four basis points to 4.20% on Thursday. The yen stabilized against the dollar after a decline, while Japanese inflation data for June came in softer than expected. The dollar index held on to gains from the previous session.

US initial jobless claims data showed the largest increase since early May, indicating a cooling labor market and reinforcing expectations that the Federal Reserve will soon cut interest rates. The central bank is moving closer to reducing borrowing costs in September, supported by growing confidence in achieving price stability. Federal Reserve Chair Jerome Powell is expected to signal this move more explicitly after the upcoming policy meeting.

Political and Economic Developments in Asia

Investors are also watching for developments from China's Third Plenum meeting. President Xi Jinping has pledged to prioritize "high-quality development" for the Chinese economy, but there are few indications of major steps to boost demand or address the property market slump.

The negative price action in Asian equities today is attributed to concerns over potential new US restrictions on the semiconductor sector and the relatively underwhelming outcomes from China’s Third Plenum.

New data revealed that Chinese investors sold a record amount of US securities, including stocks and bonds, in May, reflecting ongoing diplomatic tensions between the two largest economies.

Corporate and Commodity News

In corporate news, Samsung Electronics Co. has agreed to resume negotiations with the union organizing strikes at its chipmaking plants.

In the commodities market, oil prices edged lower due to concerns that slowing Chinese growth could jeopardize consumption. Gold prices also fell amid speculation that the recent rally to an all-time high may have been overdone.