Gold held its breath before the decision of the Fed
Gold prices dropped to a 4-week low on Aug. 9 due to a stronger dollar and investor concerns about the US inflation index.
When the dollar gains 0.6%, gold loses appeal for holders of other currencies. The main obstacle for gold prices is the Federal Reserve's "hawkish" stance. Despite risks to the US economy, the Fed has not decided when to end its tightening cycle.
As a result, gold prices will remain stagnant until there is more clarity about the economic situation.
When the dollar gains 0.6%, gold loses appeal for holders of other currencies. The main obstacle for gold prices is the Federal Reserve's "hawkish" stance. Despite risks to the US economy, the Fed has not decided when to end its tightening cycle.
As a result, gold prices will remain stagnant until there is more clarity about the economic situation.
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A lower clear will increasingly create a bearish technical trend that will converge with the IGCS signal. The latter is also closely linked to the lows from June. Confirmation of a breakout below could usher in a revisit to the March low.
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The recent volatility in the bond market where 10-year yields hold around 4% is a strong sign that investors are losing faith in the dollar.
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In key external markets saw the US dollar index slightly lower. Nymex crude oil prices are higher and trading around $84 a barrel. Meanwhile, the benchmark 10-year US Treasury bond yield is currently at 4.182 percent.
