The price of gold may again rise after fed decision

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The past week was quite eventful for gold. The precious metal managed to stand on the highs of mid-July in district 1250 and sink at the end of a trading five-day week, fell back under 1240. Monday quotes began with the restoration, but the momentum is not yet inspire confidence, despite widespread retreat of the dollar.
The demand for the American currency began to fade on Monday. First, the players record profits after Friday’s rally on the escape from risks, which, by the way, polohalo, loosening the interest to buy USD. Second, markets are preparing for the main event this week is the fed policy meeting, which may be difficult for the us currency, despite the high expectations of higher interest rates.
There are considerable concerns about the change in rhetoric of the regulator in the “dovish” side. The Central Bank may begin to prepare the ground for the slow process of tightening policy, citing the deterioration of health of the economy. Additional risk creates the prospect of a cooling of inflation due to the recent collapse in oil prices.
This scenario is called “dovish” rate hike could set the dollar a negative tone to the end of the year. In this case, gold will win, while on the other hand, the potential improvement in the attitude to risk will limit the upside potential of the precious metal.
Depending on the degree of softness of tone by the fed, gold may try to test the recent highs in the 1250 area before the end of this week.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS