FX168 Financial News (Hong Kong) - The rise of the dollar index has slowed down significantly. After the speech of the third head of the Federal Reserve, William Williams, the probability of the Federal Reserve raising interest rates in December fell to 67%. Last week, officials such as Federal Reserve Chairman Powell also changed their hawkish attitude and issued warnings about economic risks. This has provided a certain support for gold. So, in the case of the constant correction of the dollar, has gold already bottomed out?
At present, the market's expectation of the Federal Reserve's interest rate increase in December is getting lower and lower, and the path of the Federal Reserve's interest rate increase in 2019 and beyond has also been shaken. The dollar index once fell to 96.09, the lowest level since November 8.
(Spot gold sky chart, source: FX168 financial network)
Previously, gold rose from the Fibonacci support of $1197 to 1224, which was a 61.8% retracement of the downward trend of $1239.
David Brady, an analyst at Sprott Money, said that since April 11, the Sino US trade issue has been Gold price One of the driving factors of the rise. However, analysts pointed out that the gold price is unlikely to continue to rise until the dollar/yuan peak.
If the Federal Reserve decides to postpone the plan of raising interest rates or reducing the balance sheet, the gold price is expected to continue to rebound. However, from the current point of view, it is unlikely that the Federal Reserve will stop raising interest rates immediately.
At present, the Federal Reserve still maintains strong confidence in the U.S. economy, which will support the Federal Reserve to raise interest rates.
The second factor affecting gold is the US stock market. The recent trend of the US stock market is relatively weak. Analysts pointed out that the "Trump boom" may end. From the fundamental aspect of the economic cycle, the US economy may be gradually shifting from recovery to stagflation, and the US economy may have peaked in a decade.
If the US stock market continues to fall, then gold is expected to rebound.
From these aspects, although the gold price may rise, it is too early to determine the bottom of the gold price.
Checked by: TIER
