Gold – Drop ahead?[Video]
![Gold – Drop ahead?[Video]](https://editorial.fxsstatic.com/images/i/gold-03.jpg)
Potential for the bigger drop and trade idea explained.
Author
Petar Jaćimović
FXCentrum
Petar Jaćimović was born on 8 July 1989 in Jagodina, Serbia.
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GBP/USD holds recovery near 1.3550 in European trading hours on Wednesday. The UK annual Consumer Price Index (CPI) inflation picked up to 2.9% in July, meeting estimates, while core CPI rose by 2.6% YoY in July versus 2.5% expected. Mixed UK inflation data failed to provide any impetus to the British Pound.
EUR/USD stretches higher toward 1.1600 in Wednesday's European session. The US Dollar resumes its downside as weak US economic data weigh on expectations of tighter Federal Reserve policy. Traders will take further cues from ECB President Christine Lagarde’s speech and the FOMC Minutes later in the day.
Gold climbs back above $4,350 during the first half of the European session, reversing a part of the previous day's heavy losses. The US Dollar attracts some sellers, and for now seems to have stalled this week's goodish recovery from a two-month low, which is seen as a key factor supporting the commodity. Bulls, however, might opt to wait for more cues about the US Federal Reserve's future policy path before placing fresh directional bets on the non-yielding yellow metal.
Shiba Inu recovers slightly, trading at $0.0000044, after finding support around the critical level earlier this week. The dog-themed meme coin shows improving sentiment as social dominance rises, funding rates turn positive, and bullish traders increase their long positions. On the technical side, SHIB suggests a potential recovery if it holds above the key $0.0000043 level.
Bear steepening turned into bear flattening in Europe yesterday. Daily changes on the German yield curve ranged between +2.4 bps (30-yr) and +5 bps (2-yr). EU swap rates added 0.9 bps (30-yr) to 4.5 bps (2-yr). The US/Iran stalemate and higher energy prices offer a first explanation.
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.
