As it is known that the USD is experiencing a decline. As one of the main currencies in the market, these fluctuating prices certainly have an impact on several traded commodities. One of these commodities is gold. Now gold is in a good position or strengthens.
Gold surged about 1% as the dollar weakened. Meanwhile, expectations surrounding the US Federal Reserve holding on to its dovish monetary policy this week increased the allure of the safe-haven metal. However, it still cannot be sure until now.
In international markets, the pot of gold is now up 0.9% to $ 1,959.64 per ounce. US gold futures also rose 1.1% to $ 1,969. This increase in the price of gold can occur in several conditions. It is especially so if the dollar shows some weaknesses.
Current Dollar Conditions
Gold is up as the dollar is under less pressure. It is what makes this major currency weaken. Many analysts also saw Steven Munchin as suggesting they wanted a fiscal stimulus deal to go ahead, so the dollar would translate even more.
The chief market strategist at Blue Line Futures in Chicago pointed out to the US Treasury Secretary. The dollar was down as much as 0.4% against its rivals, the strength of gold's appeal to investors holding other currencies. There could still be a deal with the US in the future.
Congress for assistance that is more related to the federal coronavirus can also be done in the future. He is also looking forward to the bipartisan proposals from the members that are expected to be obtained by Monday night.
Bullion Shows an Upward Trend
Bullion has risen 29% this year on support from massive stimulus from global central banks. It was done for the impact of the coronavirus pandemic. Investors are now seriously considering the Fed's policies due out on Wednesday to take the further steps.
The Fed is expected to maintain its target inflation rate for the market. Many investors will exercise 2% for some time and they will increase their Quantitative Easing (QE) purchases. Therefore, they hope that gold must continue to support that plan.
Market players are also awaiting Bank of Japan and Bank of England policy decisions due on Thursday. This policy will certainly affect several situations. Meanwhile, the European Union is increasing pressure on Prime Minister Boris Johnson to back down from breaching the Brexit divorce agreement.
Gold will continue to move higher due to political uncertainty in the United States, Brexit, and the overall weak economic conditions in the world. That's what Jeffrey Christian, managing partner of the CPM Group said and it is quite reasonable.
AUD /USD is in a Positive Trend
AUD/USD remains positive around the 0.7290 marks on Tuesday morning in Asia. Thus, the Australia pair maintained the previous day's gains amid market optimism nowadays. However, continued bulls await important data or events that may occur in the future.
Although the US challenged AstraZeneca to restart the vaccine trials, which dimmed the positive mood earlier in the week; the market players are confident that central bankers will do their best to improve their respective economies due to the coronavirus pandemic.
It's also worth noting that new cases of coronavirus (COVID-19) from Australian hotspots fell to a three-month low over the weekend and supports upbeat trading sentiment amid a sunny calendar day. On the other hand, worries arise because of a no-deal Brexit.
It was due to the Tory government's push for the Internal Market Bill. Joining the US-China tussle can hold back the bulls. Looking ahead, the Minutes of the RBA's August monetary policy meeting will precede China's Industrial Production and Retail Sales data for the previous month.
