In response to the violence, gold prices dropped to their lowest levels in three weeks, sinking under $3,320 per troy ounce. This drop off is indicative of a larger trend across the market. The selling pressure is mostly emerging with recent headwinds from the change in investor sentiment and from a strengthening US dollar.
Market analysts noticed a sharp decrease in gold prices. This drop happens against the backdrop of some overall strength in the greenback and a broad US yields selloff. These elements have played a major role in the precious metal’s retreat. Improved geopolitical tensions have contributed, with investors recalibrating their portfolios in light of a happier global outlook.
The EUR/USD currency pair has seen its own ups and downs, but largely keeps a consolidative theme. After pullback on Monday, the pair has since retreated to three-day lows around 1.1640. Due to this pressure, the strengthening of the US dollar puts the EUR/USD pair into the spotlight. From a fundamental perspective, investors are preparing for several important upcoming events that may affect market direction.
At the same time, the Australian dollar (AUD) has come under pressure as well, falling sharply to three-week lows just below the 0.6450 area. The return of a general bid bias for the US dollar only compounds the pressure on the AUD/USD pair. Investors eagerly await this Wednesday’s release of the FOMC Minutes. They look forward to the Jackson Hole Symposium, as both events offer some of the best insights available into what’s coming next for monetary policy.
As the market anticipates these key events, the decision regarding the next steps will be announced at 02:00 GMT. This announcement will have the most heavy-duty impact on investor expectations and thereby be boomeranging back to effect currency and possibly commodity markets.