Choose country & language:

Gold price balanced between conflicting market forces

Home >  Daily Market Digest >  Gold price balanced between conflicting market forces

Written by:
Myrsini Giannouli

09 June 2022
Share the article

Gold price was steady on Wednesday, exhibiting low volatility, as the dollar firmed. Gold traded sideways on Wednesday, fluctuating around the $1,852 per ounce level. If the price of gold decreases, support may be found at $1,786 per ounce, while resistance may be found at around 1,920 per ounce and higher up at $2,000 per ounce.

The price of gold is balanced between conflicting market forces, supported by risk aversion sentiment but pushed down by high dollar and real yields. 

As the dollar and US bond yields rise, competing assets, such as gold, become less appealing as an investment. The dollar firmed on Wednesday, with the dollar index remaining above 102.5. Bond yields also remained high, with the US 10-year treasury note yielding above 3.0%. Real yields compete directly with gold, which is a non-interest-bearing asset, and their rise puts pressure on the price of gold. 

Increased risk aversion sentiment due to the war in Ukraine has boosted gold prices over the past few months. As however, the crisis drags on, and risk sentiment is slowly returning to markets, undermining gold price. Rising geopolitical tensions work in favor of safe-haven assets, increasing the dollar’s appeal as an investment. Gold is also considered a safe-haven asset, but the dollar has been outperforming its rivals.

High inflation rates are also known to support the price of gold, which is often used as an inflation hedge, and with global inflationary pressures increasing, the gold price is boosted. This week, US CPI inflation data are scheduled to be released on June 10th and may affect the gold price.

High inflation, however, is a two-edged sword for the price of gold, as it increases the chances of Central Banks raising their interest rates, which reduces the appeal of gold. The ECB’s interest rate announcement on Thursday may cause volatility in the price of gold.

Stalling global economic growth also gives rise to fears of recession, further supporting the price of gold. Concerns about the state of the economy in China, after the extensive Covid lockdowns in Shanghai and other cities, also boost the gold price.

XAUUSD 1hr chart


The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article:

Latest news

Dollar tumbles as markets anticipate Fed pivot

Myrsini Giannouli 29 November 2023

Gold prices surge as US yields decline

Myrsini Giannouli 29 November 2023

Oil prices rally on anticipated supply cuts

Myrsini Giannouli 29 November 2023

Bitcoin rises above key $38,000 level

Myrsini Giannouli 29 November 2023
Why TopFX
13+ years

industry presence
as a Liquidity Provider

from 0.0 pips

and reliable execution


client funds


customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!