Naeem Aslam
Zaye Capital Markets
The precious metal, gold is set to record its first weekly gain in a long time. It seems like that bulls have finally returned to town as the price has cleared a major obstacle yesterday and that it broke above the 50-day SMA on the daily time frame. A lot of the upward move in the gold price is chiefly due to the weakness in the dollar index as it is failing to find any bid due to dovish narrative set by the Fed. Jerome Powell, the Fed Chairman, said yesterday any rise in inflation this year is likely to be temporary and the Fed isn’t worried about this. Remember, market players have been betting against the Fed for the last number of weeks as they believed that the Fed will have no choice but to throw the towel and accept that inflation is going to get out of control. As a result, they will have to begin start tapering their monetary policy. However, it is important to keep in mind that the Fed has so many tools in the monetary toolbox which the market players aren’t aware of. The Fed can control inflation without increasing its interest rate.
In addition to this, traders are loving the current moves in the gold price because the European Central Bank also confirmed yesterday that it will be buying more bonds as it sees the economic recovery well away from its goal. So, we have two major central banks which are well away from reaching their goals and traders believe that this is a perfect opportunity for them to start buying gold.
The information is purely for education purposes only and cannot be perceived as an advise.
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Pepe price forecast: Eyes for 30% rally
Pepe’s price broke and closed above the descending trendline on Thursday, eyeing for a rally. On-chain data hints at a bullish move as PEPE’s dormant wallets are active, and the long-to-short ratio is above one.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.