Gold, XAU / USD, US Dollar, Fed Bets, Jackson Hole – hotspots
- Gold falls down after US dollar energized from FOMC
- Traders turn to Jackson Hole for additional conical clues
- XAU /USD becomes lower after EMA pressure prices fall
Gold prices began to fall at the Asia-Pacific session on Thursday as traders across Asia digested recent market news, including the FOMC protocol. Yellow metal has fallen by almost 2% since the beginning of August, with stronger US dollar pressure exerting a frightening headwind on prices. The broad-based DXY index, which tracks Greenback and the basket of currencies, is nearly 1.5% higher this month. Gold is more expensive for investors to keep as the USD rises.
Prices have remained better than some might have expected, given that the DXY index is at a five-month high and will almost reach its peak in 2021. A certain weakness in the Treasury’s performance may explain this. A series of bad economic data has forced traders to buy US public debt. As the price of bonds rises, yields fall. This makes gold more attractive to investors, given that gold is an interest-free asset.
U.S. retail sales, which fell earlier this week, highlighted fears that a well-communicated Delta variant could dampen growth as cases increase in parts of the country. Contributions from the Federal Reserve’s interest rate increase eased this data slightly. However, Wednesday’s minutes of the Federal Reserve’s July meeting revealed that the central bank is on track to reverse asset purchases this year.
FOMC minutes seem to have made traders expensive for XAU. The narrowing of the balance sheet is considered a sign of an approaching rise in interest rates. Fed members are now in favor of reducing asset purchases, or at least talking about it. However, the next FOMC meeting is September 21 away. That puts next week’s Jackson Hole event in focus with Fed Chairman Jerome Powell speaking. Gold merchants will take his comment. Hawkish tones are likely to work against the price of gold.
Golden technical forecast
The rise was eased as the price of gold approached the psychologically impressive 1800 level earlier this week. The XAU / USD is now moving lower and the weekly rise could be negative. The 26-day exponential moving average seems to have helped raise the cap. If the RSI turns below its neutral 50 midpoint, the path of the smallest obstacle may now be lower.
Golden daily schedule
The chart has been created TradingView
Gold COMMERCIAL ASSETS
– Written by Thomas Westwater, DailyFX.com analyst
Be in touch Thomas, use the comments section below, or @FxWestwaterTwitter