Gold prices are under pressure as the U.S. dollar continues to rally, weighing on the metal’s recent bullish run-up. As on Thursday, gold price had jumped back to $3,320 per troy ounce. This rally came after a drop towards the $3,280 level, which traders were betting on being a possible bottom. The general risk-on attitude among investors would likely see gold struggle under what has been a fairly modest, knee-jerk reaction.
These recent changes in the market paint an unclear picture overall. Performances are seen to be indecisive across risk-enhanced assets. Speculators are hungry to buy riskier and riskier investments. Yet, with the Greenback’s sky-high comeback, it is diminishing gold’s allure as a safe-haven investment. When the dollar gets stronger, that usually leads to lower gold demand, since the yellow metal is denominated in dollars.
In foreign exchange markets, the AUD/USD currency pair continues to soar. It is approaching a very important resistance area at least near 0.6400. This increase is a sign that traders are bullish on the Australian dollar going up in value vs. the U.S. dollar. Supporters of the Greenback’s strengthening should consider the role it’s currently playing in this dynamic, as the dollar’s strength typically leads and distorts other currencies and commodities.
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