Gold has always been seen as an anti-inflationary tool. However, its continued decline since the beginning of the year amid high consumer prices has shown the opposite. The quotes are clearly sensitive to the dynamics of real US Treasury yields and the fact that interest rates on 10-year inflation-protected debt have risen above 1%. The downward trend also includes the movement of gold futures, which, although separated from physical gold, reacts to the dynamics of the global economy and monetary policy. Strong Chinese demand and a 12-week ETF outflow also contributed to ETF holdings falling to their lowest level since January.
Capital flows into gold ETFs
The most important headwind for gold is the recent rise in the dollar. Since the metal is denominated in the US currency (XAU / USD), the accumulation is negative for this rate. $
rose thanks to Treasury yields, which recently reached their best dynamics. That means a likely increase in the federal funds rate, and that’s not a favorable environment for the metal.
However, given that investors expect a 75 basis point interest rate cut as early as this September, it is possible that the amount of short positions will remain low, leading to a recovery in gold. After all, the daily chart has two inside bars that allow pending orders to buy at $1,680 and sell near $1,659. The second option is better because the target price level remains at $1,600. Another goal is a tracking rate of 161.8 percent.
Relevance until 08:00 2022-09-23 UTC 2 The company does not provide investment advice and the results of the analysis are not guaranteed. The market analysis published here is intended to raise your awareness, but not to provide trading instructions.