Kinesis Gold Market Commentary - 15 July
Gold price above the $1,820 resistance
The correlation between the US dollar and the gold price remains high. The greenback’s decline pulled up bullion price, which jumped above $1,830, strongly surpassing the resistance placed at $1,820.
From a fundamental point of view, this jump could be seen as a market reaction to Jerome Powell's speech, after he explained that the Federal Reserve will have no rush for reducing the current expansive monetary policy.
Gold and inflation
Despite inflation growing and the economic recovery, the US Central bank will not immediately change its monetary policy, while a monetary stimulus is still needed, as the Federal Reserve will wait for “substantial further progress”.
Overall, the markets interpreted this as a dovish speech, with the 2-year bond yield declining to 0.22%. The Dollar index declined by 0.4% to 92.2, while gold expanded the recent gains. The technical picture for gold is continuing to improve, as the precious metal jumped above the resistance level of $1,820, confirming the massive interest of investors for gold in the current scenario.
Carlo Alberto De Casa
Kinesis Market Analyst
Carlo Alberto De Casa is Market Analyst for Kinesis.
He also writes as a technical analyst for the Italian newspaper La Stampa.
Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
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