Spot gold prices touched an all-time high this morning, reaching $3,508 before profit-taking, prompted by a modest US dollar resurgence, drove a retreat to levels just below the session’s opening. However, the scope for further price declines appears limited. A bearish dollar outlook, underpinned by expectations of a Fed rate cut and some distancing from US assets, is likely to continue to shape investor sentiment in the run-up to the year-end, benefiting gold due to the inverse price correlation between the two assets. At the same time, the prospect of peace between Russia and Ukraine is fading, while in Gaza there is no end in sight to the fighting. This geopolitical turbulence tends to increase demand for safe-haven assets, supporting the precious metal — a dynamic accentuated by fears that political interference could undermine the Federal Reserve’s independence, and by tariff-related uncertainty. Against this backdrop, traders will be closely watching the release of key economic data this week, including US employment figures on Friday, which could reinforce dollar-bearish sentiment and provide further support for gold should the numbers confirm expectations of a cooling American economy.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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