Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

Spot Gold traded not far from two-week highs in Europe on Monday, after a shift in the Federal Reserve’s policy framework indicated borrowing costs in the country would stay low for a longer period of time.

In his speech at the Jackson Hole virtual symposium last week Federal Reserve Chair Jerome Powell said the central bank would aim to achieve an average inflation of 2%, thus, allowing the rate to run moderately above or below that objective for some time to support economic recovery and employment. This means interest rates will probably remain at lower levels for longer despite a rise in inflation.

An environment of lower interest rates and massive monetary stimulus tends to support Gold, as the opportunity cost of holding the commodity is reduced. At the same time, this weighs on US Dollar valuation, which makes Gold less expensive for holders of other currencies.

In terms of physical trade, last week dealers in India introduced the biggest discounts on gold in five months, after lower domestic prices did not stimulate demand for the commodity.

The country registered a global record for new COVID-19 infections per day over the weekend, while confirmed cases worldwide have already surpassed 25 million.

As of 9:07 GMT on Monday Spot Gold was edging down 0.19% to trade at $1,961.24 per troy ounce, after earlier touching an intraday high at $1,976.78, or a price level not seen since August 19th ($2,006.74). The precious metal has retreated 0.87% so far in August, after four consecutive months of gains.

Meanwhile, Gold futures for delivery in December were edging down 0.34% on the day to trade at $1,968.10 per troy ounce, while Silver futures for delivery in December were up 1.03% to trade at $28.075 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching up 0.08% on Monday to 92.38, after earlier slipping as low as 92.15, or its weakest level since August 19th (92.15).

Meanwhile, near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of August 31st, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on September 15th-16th, or unchanged compared to August 28th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,954.04
R1 – $1,984.89
R2 – $2,004.75
R3 – $2,035.60
R4 – $2,066.45

S1 – $1,934.18
S2 – $1,903.33
S3 – $1,883.47
S4 – $1,863.61

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Natural gas trading outlook: futures extend rallyNatural gas trading outlook: futures extend rally Natural gas futures were higher during early trade in Europe today, as traders saw weather patterns calling for rising temps over the southern US. Analysts, however, project widespread comfortable temps, set to ease natgas inventories into […]
  • Forex Expo 2022 Hosts the Top Community of Forex IndustryForex Expo 2022 Hosts the Top Community of Forex Industry The legendary Forex Expo with a 20-year history will take place in Cyprus once more to help professionals learn, share and celebrate the best strategies in the FX world.Visitors of the largest global interactive B2B event in Europe […]
  • Forex Market: AUD/CHF daily forecastForex Market: AUD/CHF daily forecast During yesterday’s trading session AUD/CHF traded within the range of 0.8339-0.8396 and closed at 0.8382.At 6:46 GMT today AUD/CHF was gaining 0.13% for the day to trade at 0.8402. The pair touched a daily high at 0.8408 at 5:55 GMT, […]
  • Forex Market: GBP/BGN trading outlook for May 30thForex Market: GBP/BGN trading outlook for May 30th Friday’s trade saw GBP/BGN within the range of 2.5574-2.5750. The pair closed at 2.5728, going up 0.37% on a daily basis. It has been the 11th gain in the past 21 trading days. The daily low has been the lowest level since May 24th, when a low […]
  • Natural gas trading outlook: futures slide on EIA reportNatural gas trading outlook: futures slide on EIA report Natural gas futures slid under pressure from a US report, which revealed natural gas inventories in the US logged another massive weekly build, continuing the longest run of bearish reports in more than 20 years.Front-month natural gas […]
  • MetLife Inc. share price down, opposes FSOC decision to be categorized as “systemically important”MetLife Inc. share price down, opposes FSOC decision to be categorized as “systemically important” A panel of U.S. regulators recommended that MetLife Inc. should be designated a systemic risk to the financial system. Such a decision is to subject the company – the largest life insurer by assets in the country, to tighter oversight by the […]