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On Wednesday, gold prices continued climbing, albeit haltingly, as the dollar and US treasury yields dipped. Recent statements by FOMC members are now leading traders to believe that the Fed’s fiscal policy this year will not be as aggressively hawkish as originally anticipated. The dollar, whose price had been pushed up last week in expectation of frequent and substantial rate hikes, weakened. In addition, gold competes directly as an asset with treasury yields, and when wields decline, gold becomes more appealing to investors. The price of gold is also supported by the ongoing crisis between Russia and Ukraine, as investors turn to safe-haven assets. Diplomatic talks continue though, and if the situation is resolved peacefully, gold price might drop.
Gold continued its ascend on Wednesday, on a weakening dollar, going above the key $1,800 per ounce level. If the price of gold rises again, it may find resistance at $1,829 per ounce and further up at $1,853 per ounce, while if the price of gold decreases further, support may be found at 1,782 per ounce. This week, the gold price is expected to show some volatility, due to mounting tensions between Russia and Ukraine.
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Written by:
Myrsini Giannouli
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