Gold prices are now facing downward pressure, hovering around $3,300 per troy ounce. A huge, daily decimating decline is exacerbating this circumstance. The gold metal’s value now sits on the razor’s edge, challenging this important psychological price point as battlefield lines are drawn and market structure changes.
The XAU/USD pair continues to take the shape of the underlying as traders await a shift in attention towards the fresh FOMC Minutes. One thing is for certain, market participants are growing weary with an ongoing sense of U.S. trade front. In parallel, driving the volatility today, are mounting geopolitical concerns. Consequently, gold’s weakness is more likely a signal of broader market panic.
In the currency markets too, GBP/USD is on the retreat. On Wednesday, the pair tumbled down through the major 1.3500 support level, setting new three-day lows just under 1.3450. The decrease comes on the heels of dramatic increase of interest in purchase U.S. dollar. Unfortunately, this renewed interest has taken its toll on the British pound.
At the same time, EUR/USD is on the defensive too, hovering near 1.1300 handle ahead of the FOMC Minutes. The euro has pushed back down on its upward correction from last month’s highs. After the latest rally, it now appears primed to test significant support at or near 1.1300. The continued strength of the U.S. dollar is putting additional upward pressure against the euro.
Traders rushed to their screens early Tuesday. Wall Street had returned from the long weekend positively abuzz with new energy. That makes the lead up to this afternoon’s FOMC Minutes—set for release in the European evening—all the more troubling in the market’s anxious mood.
As worries over the U.S. trade war and geopolitical tensions continue to weigh on sentiment, traders are wading carefully when it comes to positioning. For the GBP, the aggressive trend of USD-buying has driven GBP/USD lower still to 1.3450.