Gold prices extended gains on Wednesday, as the dollar weakened, and gold prices climbed to $1,842 per ounce. If gold prices increase, resistance may be encountered near $1,847 per ounce, while if gold prices decline, support may be found near $1,773 per ounce.
Gold prices have been predominantly directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. Gold prices dropped near a two-month low in the past few days, weighed down by a stronger dollar and US yields combined with higher rate hike expectations.
The dollar dipped early on Wednesday, and the dollar index touched the 104.1 level but pared losses later in the day, climbing to 104.5. US Treasury yields gained strength, with the US 10-year bond yield rising above 4.0%.
Gold prices extended gains on Wednesday, as they had been trading near two-month lows. However, this rally might be short-lived, as increased rate hike expectations are boosting US bond yields.
US inflation data last week showed that price pressures in the US remain high and are not easing at the pace anticipated, putting pressure on gold prices. The Federal Reserve raised interest rates by only 25 basis points at its February meeting, bringing the benchmark interest rate to a target range of 4.50% to 4.75%. Rate hikes have become less aggressive and may continue at their current pace, but the Fed might raise interest rates for longer than previously expected. Current market odds lean towards further tightening in the upcoming Fed meetings and an increase in interest rates up to 5.25%. Market expectations of the Fed peak interest rate continue to rise on hotter-than-expected US price pressures, pushing gold prices down. Increases in central banks’ interest rates put pressure on gold prices since assets yielding interest become a more appealing investment compared to gold as interest rates rise.
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.
as a Liquidity Provider
and reliable execution
Fill in the registration
form and click
Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.
When your live account is approved, you can deposit funds and start trading on your chosen platform!
The website you are now viewing is operated by TopFX Global Ltd, an entity which is regulated by the Financial Services Authority (FSA) of Seychelles with a Securities Dealer License No SD037 that is not established in the European Union or regulated by an EU National Competent Authority.
If you wish to proceed please confirm that you understand and accept the risks associated with trading with a non-EU entity (as these risks are described in the Own Initiative Acknowledgment Form and that your decision will be at your own exclusive initiative and that no solicitation has been made by TopFX Global Ltd or any other entity within the Group.
Don't show this message again
These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.