PULL PRICE OUTLOOK:
- Gold prices rose to over $ 1,800 US dollar fell to a two-week low
- The FOMC the meeting is in focus today, with markets expecting only modest changes from the June statement
- The world’s largest ETF issued 6.8 million shares in July
The price of gold – every day
Gold prices rose 0.4% to $ 1,806 time On Wednesdayin the middle of the day session as investors expected two-day results FOMC meeting. Economists expect only modest changes from the June policy statement, focusing on inflation, pandemics and labor market conditions. However, market participants want to find clues about the central bank’s tightening schedule Jerome Powell’s press conference.
The DXY US Dollar Index declined to a two-week low, reflecting the market outlook a dovish-biased Fed. Therefore, less stunt or hawk-based tone may lead to an increase in the market volatility and strengthen the Greenback by pulling gold prices lower. The opposite may be true if the meeting leads to surprising surprises.
The world’s largest gold ETF – SPDR Gold Trust (GLD) – saw that this month’s shares fell by 6.8 million this month, indicating that more sellers are returning to the precious metals market. The price of gold and the number of GLD shares outstanding have been strongly positively correlated in the past (Figure below). Therefore, the accelerated pace of ETF redemption can be considered a strong signal.
Gold price vs. GLD ETF shares outstanding – 12 months
Source: Bloomberg, DailyFX
Technical analysis of gold prices
Technically, gold prices are likely to have broken the “Ascending Channel” and entered a technical setback. Immediate resistance levels can be found for $ 1,835, while immediate grants can be found for $ 1,800 and then $ 1,794. The MACD indicator is below the neutral center, indicating that the rate of increase may be weak.
– Wrote DailyFX.com strategist Margaret Yang
Use the Comments or section below to contact Margaret @margaretyjy Twitter