Gold prices hit an all-time high of $2,450 per ounce on Monday but declined later in the week dropping to $2,330 per ounce on Thursday. If gold prices rise, resistance may be encountered again at the all-time high of $2,450 per ounce, while if gold prices decline, support may be encountered near $2,280 per ounce.
Gold prices have been typically directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar surged on Thursday and the dollar index rose above the 105.0 level. US treasury yields remained steady, with the US 10-year bond yielding approximately 4.43%.
Gold prices have experienced a meteoric rise recently and are trading in overbought territory. Market expectations of Fed rate cuts are fluctuating strongly, causing volatility in gold prices.
Gold prices are affected by central banks’ interest rates. A restrictive monetary policy hinders economic growth lowering the global economic outlook and putting pressure on gold prices. The US Federal Reserve kept interest rates unchanged at its latest policy meeting, within a target range of 5.25% to 5.50%.
Renewed rate cut expectations boosted gold prices since the release of the US inflation report last week. Inflationary pressures in the US are easing, which may allow the US Federal Reserve to start cutting interest rates by September.
Gold prices gained strength on Monday, rising to an all-time high amid uncertainty on the Fed rate outlook. Hawkish Fedspeak, however, put pressure on gold prices later this week. Odds of rate cuts are becoming more moderate, putting pressure on gold prices, as policymakers state that they do not intend to start reducing interest rates until there is more evidence of disinflation. The uncertainty around the US Fed rate outlook is causing volatility in gold prices.
The minutes of the latest FOMC meeting were released on Wednesday and confirmed that Fed officials consider that inflationary pressures in the US remain high. Fed policymakers felt that the progress of disinflation in the first quarter of the year was disappointing and that interest rates would need to remain at high levels for longer for inflation to cool sufficiently.
China announced stimulus measures to aid its ailing economy last week. Reports of “historic” steps by China to stabilize its property sector boosted gold prices since China is one of the world’s largest markets for gold.
Geopolitical tensions also raise the appeal of safe-haven assets boosting gold prices. Concerns that the crisis in the Gaza area may spread to neighboring countries are raising demand for safe-haven assets keeping gold prices high.
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
industry presence
as a Liquidity Provider
and reliable execution
client funds
customer support
Fill in the registration
form and click
"Create account".
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
The TopFX website uses cookies to optimise user experience.
These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.
You can customize your selection of which cookies you want to accept.
These cookies are necessary for the website to function correctly and cannot be switched off.
Functional cookies allow the website to remember users' preferences and the choices you make on the website such as username, region, and language.
These cookies are used to track visitors across our websites and show you more relevant ads. Marketing cookies also include third-party cookies from partners. For more information relating to data protection & collection please view our Privacy Policy and Cookie Disclosure.