Dollar falling unexpectedly and what should Gold investors do?
The price of gold has increased due to the decline in the US dollar and the decrease in bond yields following poor economic indicators, raising doubts about whether the Federal Reserve (Fed) can continue its hawkish stance.
Edward Moya, a senior market analyst at OANDA, stated, "The market last week seemed to be pricing in that the Fed would hike rates more, but future data may show that it won't happen."
Safe-haven demand for gold is also supported by the highest yield spread between 2-year and 10-year US Treasury bonds since 1981, reflecting concerns that the prolonged rate hike cycle by the Fed will push the US economy into a recession.
Futures markets have already priced in rate cuts at the recent Fed meeting in September, with the first rate cut predicted to occur in January.
Lower interest rates tend to increase the price of gold as it reduces the opportunity cost of holding non-yielding assets.
Gold also received support from the decline in the US dollar after data showed continued contraction in US manufacturing activity in June.
TRADE STRATEGY FORECAST:
SELL XAUUSD AROUND PRICE RANGE 1928-1932
Stop Loss: 1936
Take Profit 1: 1920
Take Profit 2: 1915
Take Profit 3: 1910
BUY XAUUSD AROUND PRICE RANGE 1903-1907
Stop Loss: 1898
Take Profit 1: 1915
Take Profit 2: 1920
Take Profit 3: 1925
Note: Trade with 1% of your account to ensure proper capital management. Do not exceed 5% of your account within the nearest 10 price levels. Always set a stop loss in any situation. Pay attention to trades based on your current capital.
Edward Moya, a senior market analyst at OANDA, stated, "The market last week seemed to be pricing in that the Fed would hike rates more, but future data may show that it won't happen."
Safe-haven demand for gold is also supported by the highest yield spread between 2-year and 10-year US Treasury bonds since 1981, reflecting concerns that the prolonged rate hike cycle by the Fed will push the US economy into a recession.
Futures markets have already priced in rate cuts at the recent Fed meeting in September, with the first rate cut predicted to occur in January.
Lower interest rates tend to increase the price of gold as it reduces the opportunity cost of holding non-yielding assets.
Gold also received support from the decline in the US dollar after data showed continued contraction in US manufacturing activity in June.
TRADE STRATEGY FORECAST:
SELL XAUUSD AROUND PRICE RANGE 1928-1932
Stop Loss: 1936
Take Profit 1: 1920
Take Profit 2: 1915
Take Profit 3: 1910
BUY XAUUSD AROUND PRICE RANGE 1903-1907
Stop Loss: 1898
Take Profit 1: 1915
Take Profit 2: 1920
Take Profit 3: 1925
Note: Trade with 1% of your account to ensure proper capital management. Do not exceed 5% of your account within the nearest 10 price levels. Always set a stop loss in any situation. Pay attention to trades based on your current capital.
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