EURUSD Forecast & Technical Analysis – 31st July 2020 USD fell on Friday against most…
Gold prices are declining again and eyes are on the Federal Reserve meeting
Gold prices decreased during today’s session in the European market, approaching the third daily loss during the last four sessions. This decline is due to the continued rise of the US dollar against a number of global currencies, according to the inverse relationship between them.
This comes at a time when investors await many expected economic developments, which include the launch of the activities of the first meeting of the Federal Reserve Board during this year 2021.
At exactly 08:50 GMT, the spot gold prices were down by about 0.4%, to trade around $ 1.848.44 an ounce, from today’s session’s opening level at 1856.06% per ounce, and early in the session, it reached the highest price at $ 1861.76 per ounce.
While US gold futures settled unchanged to remain at the level of $ 1862 an ounce.
During Monday’s trading, the precious yellow metal “gold” managed to end the session up by less than 0.1% in the first daily gain in the last three sessions, as prices received some support recently thanks to the relative improvement in demand levels for the metal amid investors’ reluctance to take risks and focus on investment. In gold is one of the best alternative safe-havens.
Prices had gained 1.5% over the course of last week’s transactions, thus recording their first weekly gains in the last three weeks, and with the best weekly gain during this year, 2021.
Gold prices decline with the rise of the dollar
In terms of the US dollar index trading, the index rose during today’s session by more than 0.25% to maintain its daily gains for the third consecutive session, reflecting the continuation of the widespread purchases of the US currency against a number of other competing currencies.
As we know, the rise in dollar levels negatively affects the movements in gold prices due to the inverse relationship between them.
The recent rise of the US currency comes thanks to the acceleration of investor demand for it as the best alternative investment at the present time and their reluctance to buy high-risk currencies, especially in light of the increasing numbers of Coronavirus infections around the world, in addition to increasing doubts about the speed and size of the financial package in the United States, Despite the control of the ruling Democratic Party.
And Republican lawmakers had expressed their objection to the astronomical cost of the stimulus package proposed by US President-elect “Joe Biden” earlier this month, which is estimated at about $ 1.9 trillion, and the objecting members of Congress proposed a smaller package that includes financial support for the Corona vaccination program.
Monetary policy meeting
Most market expectations indicate that the board will keep interest rates unchanged to remain at the 0.25% range.
The easing of monetary policy adds more pressure on the yields of American bonds issued by the government and benefits gold that does not yield any returns.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.