Buying the Retreat in Gold After A New Record High
It was a relatively slow day in the markets due to the absence of significant economic releases but Gold printed a new record high nonetheless. The USD continued its decline against all major currencies, while overall market sentiment remained positive as traders await Fed Chair Powell’s upcoming speech on Friday, expecting signals of a rate cut in September.
Major forex pairs stayed mostly flat, with the USD underperforming amid a risk-on environment. The anticipation of rate cuts boosting economic activity continues to support equities, as investors remain optimistic about the potential for strong growth.
Gold Chart H1 – XAU Reaches Record Highs
GOLD has been making significant moves recently, hitting a new all-time high of $2,531.66 today. Although the price has since pulled back by $30, we believe this presents a strong buying opportunity. The surge in gold prices is largely driven by expectations surrounding the Fed’s monetary policy, particularly as it impacts real yields.
Impact on Treasury Market and USD/JPY
The Treasury market is starting to reflect the strain on the US economy and the likelihood of upcoming rate cuts, which is also influencing currency movements. This has led to a rise in the USD/JPY exchange rate, which broke above 146.00 before swiftly dropping 50 pips to the 145.50s. The interplay between these factors continues to shape market dynamics.
Gold Live Chart
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