Choose country & language:

Gold rallies on the declining dollar

Home >  Daily Market Digest >  Gold rallies on the declining dollar

Written by:
Myrsini Giannouli

29 September 2022
Share the article

Gold prices climbed on Wednesday as the dollar deflated, rising to the $1,660 per ounce level. If gold prices continue to decline, support may be found at the 2020 low near $1,441 per ounce. Resistance may be found at around 1,740 per ounce and higher up at $1,765 per ounce.

The dollar, which had been trading in overbought territory, retreated on Wednesday. The dollar was volatile on Wednesday with the dollar index moving above 114.5 early in the day but sliding back to below 113 later in the day. US Treasury yields were similarly affected, with the US 10-year bond yield dropping from above 4.0%, its highest value since 2007, to below 3.8%.  

Gold prices are driven down by the shift of most major Central Banks toward a tighter monetary policy to combat rising inflation rates. Assets yielding interest become a more appealing investment compared to gold as interest rates rise. The US Fed raised its interest rate by 75 basis points last week and Federal Reserve Chair Jerome Powel has raised expectations for future rate hikes, stating that the Fed is determined to curb inflation even at the expense of economic growth. The ECB has performed its largest ever rate hike, raising interest rates by 75 basis points, pushing gold prices down and ECB officials hint at another steep rate hike at the ECB’s next meeting in October. The UK, Switzerland, and Canada have also tightened their monetary policies recently. 

Gold prices are supported by increased risk aversion sentiment. Russian President Vladimir Putin has announced the partial mobilization of Russian military reserves from civilian conscripts. Putin has also renewed threats to halt energy exports and threatened western allies with nuclear action. 

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!