Friday, 3 August 2018
Gold is down close to $1200
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what’s next
Gold continues to move in a close backward correlation with USD dollar, as yesterday USD was able to gain much, sending yellow metal down to new annual lows.
The dollar is now back to growth, receiving strong support from a number of important long-term as well as short-term factors. First, investors positively assess the current policy of the Fed aimed at restoring interest rates on the pre-crisis level. The Fed's actions are supported by a strong economic growth, which is confirmed by numerous statistical reports. Secondly, the dollar is now gaining strong support from geopolitical factors. Recent Trump administration's statements on new duties on Chinese goods greatly increased demand for the American currency.
Earlier, the growth of geopolitical risks always led to an increase in demand for gold, which played the role of the main defensive asset, but recently the gold market lost this status. In recent days, we have noted the resumption of this tendency and this became the basis for a moderate recovery of the price, but yesterday once again the main factor for gold was USD dollar, and the precious metal is not yet ready to regain the status of the main safe-haven asset.
Today, all the attention of traders will still be riveted to the dollar, as the main US statistical data will be published. Today there will be report on the labor market which is almost a guarantee of high volatility in the market, and the direction of price movement will primarily depend on the actual data. Experts predict a decline in the unemployment rate from 4.0% to 3.9%, but data on changes in average wages, where growth is expected to increase by 0.3% after 0.2% a month earlier, will be no less important. Deviation of actual data from forecast levels can cause serious fluctuations of the dollar, which will invariably affect the value of gold.
https://www.fortfs.com
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