On Tuesday gold prices reached their highest levels in six years, having been boosted by the prospect of lower interest rates as well as rising geopolitical tensions. However, the yellow metal is trading sharply lower after Federal Reserve Chairman Jerome Powell struck a neutral tone in comments made on Tuesday. While speaking at the Council of Foreign Relations in New York he stated;

“The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation”

At the forefront of uncertainties are the upcoming U.S.-China trade talks. Presidents Donald Trump and Xi Jinping are set to meet at the G-20 summit in Osaka, Japan later this week.

Additionally, Federal Reserve Bank of St. Louis President James Bullard said he doesn’t see the necessity of a half-point rate cut. Speaking with Bloomberg Television on Tuesday he stated;

“Just sitting here today, I think 50 basis points would be overdone…I don’t think the situation really calls for that, but I would be willing to go 25”

Lower interest rates make the U.S. dollar a less attractive investment and increases the appeal of non-yielding assets such as gold. For this reason, lower prospects for rate cuts pressures gold prices.

Elsewhere in the world of alternative investments, bitcoin continued its remarkable comeback on Wednesday. Facebook’s Libra cryptocurrency and the upcoming bitcoin halvening event in 2020 are viewed as major drivers in the recent surge of buying interest. During the ‘crypto winter’ of 2018, bitcoin lost 70% of its value. However in 2019, bitcoin mania appears to be back with the digital currency posting gains of over 200% since April. On Wednesday bitcoin rallied above $12,900 to reach its highest levels since January of 2018.

Gold

Any reviews, news, research, analysis, prices or other information contained in this article is provided as general market commentary, does not constitute investment advice and may undergo changes from time to time. Trading the Financial and Currency Markets on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as to your favor. Before entering trading Financial and Currency Markets, you should carefully consider your investment objectives, level of experience and risk appetite. There is a possibility that you could sustain a loss of some or more of your initial investment and therefore you should not invest money which you cannot afford to lose. You should be aware of all the risks associated with Financial and Currency Markets trading, and in case you have any doubt, rather seek advice from an independent financial advisor. Scandinavian Capital Markets AB, its owners, employees, agents or affiliates do not give investment advice, therefore Scandinavian Capital Markets AB assumes no liability for any loss or damage, including without limitation to, any loss of profit, which may be suffered directly or indirectly from use of or reliance on such information. Scandinavian Capital Markets AB strongly encourages consultation with a licensed representative or financial advisor regarding any particular investment or use of any investment strategy.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD holds gains above 1.1850 amid tepid market mood

EUR/USD is trading above 1.1850, holding onto recent gains The uptrend, however, at risk as coronavirus cases rise across the Eurozone. New lockdown restrictions may force the ECB to adopt a stronger dovish stance. Focus shifts to Powell's speech, EZ Preliminary PMIs. 

EUR/USD News

GBP/USD hovers around 1.2950 amid likely virus curbs

GBP/USD stays well bid near  mid-1.2900s following three successive failures to cross 1.3000 during last week. UK’s health authorities mull lockdown restrictions. Chancellor Sunak may extend business support loans. Fedspeak eyed amid a light calendar. 

GBP/USD News

USD/JPY drops to over six-month lows, fast approaching 104.00 mark

USD/JPY witnessed some follow-through selling for the sixth consecutive session on Monday. The USD was being pressured by fading hopes of another round of the fiscal stimulus measures. Resurgent COVID-19 cases benefitted the safe-haven JPY and contributed to the offered tone.

USD/JPY News

Gold jumps back on the bids above $1950 amid risk-aversion

Gold is back on the bids above $1950 amid growing coronavirus fears induced risk aversion. Gold's multi-week consolidation in a narrowing price range could end with a bullish breakout, as a widely-tracked daily chart indicator is about to turn bullish. 

Gold News

WTI buyers attack $41.00 amid US-Iran tension, escalating virus woes

WTI remains heavy below 50-day SMA, drops from $41.18 to begin the week. The energy benchmark keeps trailing 50-day SMA for over two weeks while taking clues from the US-Iran tussle and the coronavirus (COVID-19) headlines. Hopes of further stimulus, China’s optimism favor energy bulls.

Oil News

Forex Majors

Cryptocurrencies

Signatures