The dollar is in decline
The dollar is in decline versus other major currencies, sinking to more than 2 year lows during early Tuesday trading, as the Fed’s decision to adopt a more dovish stance towards inflation continues to reverberate in the markets. Investors see the central bank’s willingness to tolerate higher inflation levels as an indication that interest rates will remain low for the foreseeable future, reducing the appeal of dollar denominated investments.
Ricardo Evangelista – Senior Analyst, ActivTrades
The Fed’s decisions and the new inflation target opened space for a new rally for gold. After rebounding on the previous resistance level (and now support zone) at $1,920, bullion skyrocketed again to $1,990 as the greenback continues to weaken. Despite US indices continuing to rally, investors feel the need to increase the proportion of gold in their portfolio in case of new turbulence on both stocks and currencies markets.
Technically the long-term trend for gold remains bullish, with the first resistance at $2,010, which was the peak reached on the 19th August, while the next target would be the record high reached on the 10th of August just above $2,075.
Carlo Alberto De Casa – Chief analyst, ActivTrades
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.