Aftergold retreated throughout the week and attempting to reclaim the $3,350 range. Selling pressure nonetheless drove them further down to the $3,340 region per troy ounce. On the flip-side, earlier in the day gold took off to two-day highs. What happened next was a knee-jerk reaction, as the U.S. dollar was coming into a short-term recovery.
Market watchers have pointed out that falling U.S. yields throughout the curve could limit gold’s downturn. Although the current selling pressure remains pervasive, this trend provides some hope for the precious metal. All eyes are turning to next week’s new measures of business activity. Investors, economists and observers across all walks of life are looking forward to the Jackson Hole Symposium, where central bank policies should become the main attraction.
In other currency news, the USD/JPY pair has been ranging but broke below the 50-day simple moving average (SMA) today. The pair has seen consecutive bearish weekdays—Wednesday’s retreat of 0.17% marking the most significant bearish weekday streak since late July. The Greenback is enduring heavy selling pressure as fears mount that the Trump administration may be looking to undermine the independence of the Federal Reserve. Market participants are watching closely to see how it all plays out.
A hawkish surprise from the Jackson Hole Symposium might push USD/JPY through the important 148.00 level. Alternatively, if the rhetoric is non-hawkish, we may see the pair drop below the 147.00 support. This uncertainty has driven up volatility in currency markets, making trading strategies more complicated for investors than ever before.
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With increasing hawkishness from global central bankers, market participants are understandably nervous ahead of several key economic indicators. As they prepare, both gold and the U.S. dollar are in sharp focus.