Gold prices tumbled to $3,300 for a second day of losses. A variety of market factors are continuing to influence investor sentiment and demand for the precious metal. This toxic combination is driving the current downturn.
The recent upward price pressure on gold is largely due to a risk-on impulse that has reawakened demand for USD. Given the current market conditions, the dollar’s strength plays a key role in gold’s attractiveness as a non-correlated asset. In response, investors are pulling back on gold, driving prices down.
The GBP/USD currency pair is another representation of these changing dynamics, carrying its losses further below the 1.3550 level. Market participants are closely monitoring upcoming U.S. economic data and the Senate tax debate, which could further impact the dollar’s performance.
“GBP/USD extends losses below 1.3550, awaits US data, Senate tax debate.” – www.fxstreet.com
US fiscal worries, say analysts, will make it very hard for gold prices to push any lower. They further think that wagers on a future Federal Reserve rate cut will provide further underpinning for the market. The combination of these developing factors are producing a wildcard in the economic environment to help temper gold’s losses.
Moreover, expectations regarding the outlook for U.S. economic growth are still creating powerful headwinds against dollar negative market forces. Investors are fiercely testing the waters of what these data releases bode. This judgment is influencing the best trading approaches in the Forex and commodities markets.
“Gold price drops to $3,300 amid risk-on impulse, reviving USD demand.” – www.fxstreet.com