The dollar is in decline versus other major currencies, sinking to more than 2 year lows during early Tuesday trading, as the Fed’s decision to adopt a more dovish stance towards inflation continues to reverberate in the markets. Investors see the central bank’s willingness to tolerate higher inflation levels as an indication that interest rates will remain low for the foreseeable future, reducing the appeal of dollar denominated investments.
The Fed’s decisions and the new inflation target opened space for a new rally for gold. After rebounding on the previous resistance level (and now support zone) at $1,920, bullion skyrocketed again to $1,990 as the greenback continues to weaken. Despite US indices continuing to rally, investors feel the need to increase the proportion of gold in their portfolio in case of new turbulence on both stocks and currencies markets.
Technically the long-term trend for gold remains bullish, with the first resistance at $2,010, which was the peak reached on the 19th August, while the next target would be the record high reached on the 10th of August just above $2,075.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.