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Daily market commentary: Gold is edging higher, due to the inverted correlation with the US dollar



FOREX

The US dollar is slightly down against the other major currencies during early Monday trading, but still close to the multi-month highs reached last week as investors have their attention set on the Fed’s policy statement, which is due to be released on Wednesday. The recent strength of the greenback has to a large extent been supported by the pricing-in of the Fed’s hawkish pivot, so the build-up to Wednesday will provide a snapshot of investors’ expectation over the tone of the announcement, one which can further accentuate the central bank’s leaning towards bringing forward the timing of the tightening of policies, or, perhaps instead reflect new worries over the fast spread of the Delta variant in the US.

Ricardo Evangelista – Senior analyst, ActivTrades

daily market analysis

GOLD

Gold is edging higher during early Monday trading, due to the inverted correlation with the US dollar, which is losing some ground as the trading week gets underway. The performance of the dollar is expected to remain gold’s main driver during the week ahead. Gold traders will be paying close attention to the Fed’s policy statement, due to be released on Wednesday, as it is likely to have an impact on the dollar, depending on whether FOMC officials continue to move closer to earlier tightening, or instead reveal fears over the spread of the new Delta variant. The latter is likely to support the price of gold while the former could weaken it by propelling the dollar to new heights.

Ricardo Evangelista – Senior analyst, ActivTrades


Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.

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Daily market commentary: Gold is edging higher, due to the inverted correlation with the US dollar

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