Gold prices jumped up following the record low of $3,330. It’s the first time gold has dipped this low since August 1. With gold (XAUUSD) trading at $3,343. Bulls leaped at the opportunity to purchase, following closely behind a history of recent market behavior as they set up for the ever-watched release of Federal Open Market Committee (FOMC) mins.
This price recovery follows a significant downtrend that battered gold prices from record highs earlier this spring. Traders took their profits after the breakout at the resistance level at 49.70 was rejected. The decision came after their evaluation of the 14-day RSI aka relative strength index. The workshop and resultant situation has caused a flurry of mixed emotions in the market. Traders have been reassessing their positions in light of what’s shaping up to be a significant shift in monetary policy.
Read closely, the next FOMC minutes report should give explanation as to why Federal Reserve governors Michelle Bowman and Christopher Waller voted in dissent. Look to learn and be inspired by this foundational and timely document. Both men argued for the 25-basis-point cut at the most recent meeting and lost to nine of their third-placed colleagues. Back in July, the FOMC decided to leave interest rates unchanged. This pivotal move has especially piqued interest among investors regarding the central bank’s likely future course of action.
Considered a safe-haven asset, gold generally sees increased investment demand in uncertain times. The anticipated FOMC minutes report may further influence market expectations, potentially putting pressure on the central bank to consider a rate cut in September. This backdrop of uncertainty around future interest rate decisions is still largely dictating gold’s short-term price movements.
Market analysts have noted that gold price movements are increasingly correlated with overall economic conditions and the direction of central banks. The XM Metatrader trading platform has opened the new price action trends. These trends are a testament to the return of traders who are taking dynamic trades based on economic signals.