Gold prices are struggling to attract buyers amid expectations of a hawkish stance from the Federal Reserve and positive sentiment in the market. While the resilient US economy has led to speculation of fewer and slower interest rate cuts by the Fed, uncertainty about the rate-cutting path is keeping the US Dollar from gaining significant strength, which in turn supports the price of gold. Traders are cautious and waiting for the release of US consumer inflation figures on Tuesday before making any significant moves.
Recent comments from influential Federal Open Market Committee (FOMC) members have also contributed to the uncertainty. Dallas Fed Bank President Lorie Logan mentioned that there’s no rush to cut rates and stressed the need for further evidence on inflation sustainability. Meanwhile, Atlanta Fed President Raphael Bostic highlighted concerns about prolonged high inflation but expressed optimism about the US economy’s recovery to pre-pandemic levels.
The gold price remains range-bound, with support around the $2,015 area and resistance near the $2,033 level. A break below $2,000 could trigger further losses, potentially targeting the 100-day Simple Moving Average (SMA) around $1,988 and the 200-day SMA near $1,966-1,965. Conversely, a break above $2,033 could lead to a retest of last week’s swing high around $2,044-2,045, followed by potential gains towards the monthly peak near $2,065 and beyond.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.05% | 0.05% | 0.02% | 0.05% | 0.05% | 0.29% | 0.03% | |
| EUR | -0.05% | 0.01% | -0.02% | 0.04% | 0.00% | 0.24% | -0.01% | |
| GBP | -0.05% | 0.00% | -0.02% | 0.01% | 0.00% | 0.24% | -0.01% | |
| CAD | -0.02% | 0.02% | 0.03% | 0.03% | 0.03% | 0.26% | 0.01% | |
| AUD | -0.06% | -0.01% | -0.01% | -0.04% | -0.01% | 0.23% | -0.03% | |
| JPY | -0.05% | -0.01% | 0.04% | -0.03% | 0.01% | 0.23% | -0.02% | |
| NZD | -0.29% | -0.24% | -0.23% | -0.26% | -0.23% | -0.23% | -0.25% | |
| CHF | -0.05% | -0.01% | 0.01% | -0.03% | 0.00% | 0.00% | 0.24% |
RISK SENTIMENT FAQS
What exactly do the phrases “risk-on” and “risk-off” signify when it comes to financial market sentiment?
In the realm of financial jargon, the two frequently used expressions “risk-on” and “risk off” relate to the degree of risk that investors are ready to accept over the specified time. In a “risk-on” market, investors are optimistic about the future and more eager to purchase hazardous assets. In a “risk-off” market, investors begin to ‘play it safe’ because they are concerned about the future, and so purchase less risky assets that are more likely to provide a return, even if it is tiny.
What are the essential assets to monitor in order to determine risk sentiment trends?
Typically, during “risk-on” times, stock markets rise, and most commodities, with the exception of gold, increase in value due to a favorable growth outlook. Because of increasing demand, the currencies of heavy commodity exporting countries strengthen, while cryptocurrency prices climb. In a “risk-off” market, bonds rise, particularly big government bonds, gold shines, and safe-haven currencies such as the Japanese yen, Swiss franc, and US dollar all gain.
Which currencies gain when the attitude is “risk-on”?
The Australian Dollar (AUD), Canadian Dollar (CAD), New Zealand Dollar (NZD), and smaller foreign exchange currencies such as the Ruble (RUB) and South African Rand (ZAR) all tend to gain in “risk-on” markets. This is because the economies of these currencies rely largely on commodity exports for growth, and commodity prices tend to increase during risk-on times. This is because investors expect more demand for raw materials in the future owing to increased economic activity.
Which currencies increase when the attitude is “risk-off”?
The primary currencies that tend to appreciate during “risk-off” periods are the US Dollar (USD), the Japanese Yen (JPY), and the Swiss Franc (CHF). The US dollar is the world’s reserve currency, and in times of crisis, investors purchase US government debt, which is considered secure since the world’s biggest economy is unlikely to fail. The Yen has benefited from rising demand for Japanese government bonds, since a large part is held by local investors who are reluctant to sell them, even in a crisis. Swiss Franc, because rigorous Swiss banking rules provide investors with more capital protection.
