ASX200 plummets to its 200MDA

28 June, 2023

As at 10am, AEST.

Gold Spot Price $AU2870

Silver Spot Price  $AU34.33

Platinum Spot Price  $AU1400

The Australian share market endured a challenging week, breaking through its 200-day moving average (200MDA) floor and heightening worries of a looming recession among market participants. Despite trading slightly above the psychological floor price of '7000' for the ASX200, the pressure is mounting for the equities market to stage a recovery and demonstrate resilience, especially considering the increasing burden faced by public companies in managing their debt.

In contrast, the United States reported the highest level of sentiment in 17 months for the month of June (109.7, up from 102.5). Additionally, US new housing experienced a notable surge of 12.2% in May (763,000, up from the previously reported 680,000).

While the US enjoys a momentary boost in sentiment due to improved economic indicators, Australia appears to be lagging behind. Federal Reserve Chair Powell is expected to address these results in the coming days and is likely to reinforce the prediction of two more rate hikes for the remainder of the year. Given that Australia generally follows US economic decision-making, it is likely that local interest rates will be affected by these hikes, further exacerbating the challenges posed by the sluggish economic performance in Australia.

Gold and silver showed signs of a slight recovery this week, as reflected in today's charts. Silver appeared to rebound off its 200MDA, while gold still has room to move around its 200MDA. For context, we have included charts for gold, silver, ASX200, and the US500.

AX200 daily, with 200MDA

US500 daily with 200MDA

Gold daily, with 200MDA

Silver daily, with 200MDA