Conditions Poised for DXY Rally & Gold Pullback
  • Vote Up0Vote Down venynxvenynx
    Posts: 4,639Member
    Gold prices retreated below $1,862 after hitting the record high of
    $2,074.92 on August 6, which is because traders have widely dumped their
    long position in the fear of the declining risk aversion considering
    Russia has successfully registered the COVID-19 vaccine. Thereafter,
    bargain hunting spurred gold to reclaim the ground of $2,000, but the
    resistance ahead of $2,015.61 hampered gold again and took a toll over
    $100. Whether gold will regain its shine and register another record
    high has become the talking points across financial markets.To get more
    news about WikiFX, you can visit wikifx official website.


    Traders actually have kept an eye out for opportunities to liquidate
    their position at a profit after noticing the sharp rise in gold prices.
    The reason lies in the purpose of gold purchase. Traders buy gold not
    for long-term holding, but simply for profiting. Once the trading prices
    appeal to them, they will sell out for bumper profits and wait to buy
    on dips after the next slump.

      In fact, financial markets have definitely achieve a consensus that
    various vaccines from countries worldwide will be available in the short
    term, which will certainly accelerate the recovery in global economics
    and weaken the risk aversion. Under such condition, the central banks of
    various countries may reduce or even suspend the quantitative easing.

      The U.S. dollar index, the largest influencing factor of gold prices,
    has also shown a rebound mainly because the European Central Bank
    Minutes showed that its monetary policy is more dovish than that of the
    FED with a cascade of PMI data much worse than that in the U.S. As a
    result, the Eurozone is obviously the weaker one in the comparison of
    the economic and monetary policies of the two areas, which may cause a
    steep rebound in DXY and then suppress gold prices. As DXY sees its most
    critical resistance at the level of 94, a breach above there will
    negatively impact gold prices, pushing them to break through the support
    level of $1,862 and move forward to another significant one of $1,765.

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