Forex News
- WTI rebounds as persistent Middle East security risks keep Oil prices supported.
- Recovering exports and planned G7 reserve releases offer only limited supply relief.
- Traders await API and EIA inventory figures for fresh supply and demand signals.
West Texas Intermediate (WTI) rebounds on Tuesday as shipping risks in the Strait of Hormuz keep Oil prices supported despite improving Middle East exports, with US-Iran talks still deadlocked. At the time of writing, WTI trades around $89 after falling to an intraday low of $86.32, its lowest level since September 1.
According to the latest data from Kpler, Gulf crude exports, excluding Iran, averaged 18.3 million barrels per day in the final week of September, with the recovery driven mainly by Saudi Arabia. Additional supply relief came after G7 countries agreed on Friday to release 100 million barrels of diesel and crude oil from emergency reserves.
Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that flows through the East-West Pipeline reached 5.8 million barrels per day. The pipeline carries crude to the Red Sea export hub of Yanbu, providing an alternative route that bypasses the Strait of Hormuz.
According to TD Securities, “Chinese product export restrictions and growing refiner demand are increasingly absorbing the increase in supply, keeping prices elevated and risks tilted toward the upside in our view.”
Shipping risks remain elevated despite the recovery in exports. At least seven incidents involving tankers have been reported over the past week, according to shipping intelligence service Marisks. Meanwhile, fighting between Saudi Arabia and the Iran-backed Houthis leaves regional infrastructure exposed to fresh attacks.
Meanwhile, the US Energy Information Administration (EIA) raised its Oil price forecasts in its October Short-Term Energy Outlook, citing declining global inventories and tight diesel markets. The agency lifted its 2026 Brent forecast to $96.32 per barrel from $91.01 and its 2027 projection to $83.74 from $73.74. WTI forecasts rose to $88.21 for 2026 and $79.74 for 2027, from $84.65 and $69.74, respectively.
The EIA also lowered its global Oil demand forecasts to 102.4 million barrels per day for 2026 and 104.6 million for 2027, down from 102.6 million and 105 million, respectively.
Traders now turn to US inventory figures for fresh clues on supply and demand. The American Petroleum Institute (API) report is due later on Tuesday, followed by the EIA’s weekly inventory data on Wednesday.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- DXY drops back under 102.00 and below Monday's low.
- Lower bond yields ease French borrowing costs, and the Euro rebounds off a low.
Brent fell below $98 a barrel as Gulf exports picked up, and bond yields in Europe and the US fell with it. France got the most relief, as the extra yield investors want for holding its 10-year debt over Germany's narrowed to about 1.3 percentage points from more than 1.5 on Friday.
The Euro, more than half the Dollar Index, has rebounded from Monday's low, its weakest since May 2025. Every other currency in the index has gained on the Dollar except the Yen and the Swiss Franc, the two that investors buy when they're nervous.
Investors are buying risk, and the S&P 500 has hit a record. The record is narrow. Nvidia (NVDA), Apple (AAPL) and Microsoft (MSFT) now make up more than 21% of the S&P 500, and the Russell 2000 of smaller companies is barely higher.
Part of Brent Crude Oil's fall is a Group of Seven (G7) release of 100 million barrels of emergency stocks over four months. That's about five days of what went through the Strait of Hormuz before the war.
On the charts
Monday's bar topped out just above 102.50, the highest since April 2025, and left a long upper wick. Tuesday's bar has gone back under 102.00 and below Monday's low.
The drop reached the 101.75 area, less than a fifth of the rally from the September 9 low near 98.60, and the index is trading near 101.85. Momentum indicators have broadly turned down since late September. The index is still well above its 50-day Exponential Moving Average (EMA) near 100.35.
DXY, daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- GBP/USD gains 0.40% as the US Dollar retreats from multi-month highs.
- Mann says UK inflation has become increasingly embedded.
- Markets price in 87% odds of a November BoE rate hike.
The Pound Sterling (GBP) advances about 0.40% on Tuesday as the Greenback retreats from multi-month highs, boosted by hawkish comments from a Bank of England (BoE) Monetary Policy Committee (MPC) member, while a widening US trade deficit weighed on the Greenback. The GBP/USD trades at 1.3281 at the time of writing.
Sterling advances as Dollar retreats, while markets boost November BoE hike bets
An improvement in risk appetite is hurting the US Dollar, which, according to the US Dollar Index (DXY), which measures its performance against six currencies, is down 0.31% at 101.78.
In the Middle East, hostilities continued, as Yemeni forces and the Houthis exchanged fire as the former try to recapture Bab al-Mandab strait to reopen vessel traffic in the Red Sea. This pushed energy prices lower, with West Texas Intermediate (WTI), the US Oil benchmark, down 0.59% at $88.75 per barrel.
On the data front, the US trade deficit widened in August, as imports rose to a record high, resulting in record goods trade deficits with at least three countries, including Mexico. The figure came at $-105.6 billion, missing the forecast of $-102 billion.
Other data showed the labor market is solid, with the ADP Employment Change 4-week average rising to 23.75K, up from 22.5K the previous week.
In the UK, the schedule was light, with BoE’s Catherine Mann stating that inflation has become embedded. Her comments boosted the Pound, and now traders' eyes are on the BoE’s Governor Andrew Bailey, expected to speak on Thursday.
Money markets had priced in an 87% chance of a rate hike in November, according to Prime Terminal, mostly due to the prolongation of the Middle East conflict, which has elevated energy prices.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3276, keeping a bearish near-term bias as spot holds beneath the dense cluster of the 50, 100 and 200-day Simple Moving Averages (SMAs) grouped around 1.3451. Price also remains below the latest downward-sloping resistance trend lines, with nearby supply first at the earlier break level of 1.3304 and then at 1.3428, reinforcing a capped tone despite the Relative Strength Index (RSI) at 41.6 hinting at only modestly negative momentum rather than outright oversold conditions.
On the topside, immediate resistance appears at the former break of the primary descending trend line near 1.3304, followed by the secondary downward resistance around 1.3428 and the broader SMA barrier clustered close to 1.3451. On the downside, initial support is derived from the rising trend structure, with the more recent upward-support line anchored near 1.3159 and the deeper medium-term base around 1.3140, where buyers would be expected to re-emerge if the current 1.3276 pivot gives way.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.34% | -0.36% | 0.16% | -0.28% | -0.17% | -0.42% | -0.01% | |
| EUR | 0.34% | -0.07% | 0.50% | 0.04% | 0.19% | -0.09% | 0.34% | |
| GBP | 0.36% | 0.07% | 0.57% | 0.13% | 0.25% | -0.03% | 0.42% | |
| JPY | -0.16% | -0.50% | -0.57% | -0.43% | -0.31% | -0.56% | -0.13% | |
| CAD | 0.28% | -0.04% | -0.13% | 0.43% | 0.12% | -0.15% | 0.29% | |
| AUD | 0.17% | -0.19% | -0.25% | 0.31% | -0.12% | -0.28% | 0.18% | |
| NZD | 0.42% | 0.09% | 0.03% | 0.56% | 0.15% | 0.28% | 0.46% | |
| CHF | 0.00% | -0.34% | -0.42% | 0.13% | -0.29% | -0.18% | -0.46% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Scotiabank strategists Shaun Osborne and Eric Theoret report that the Canadian Dollar (CAD) is trading flat against the US Dollar, with markets showing little reaction to Quebec’s provincial election. Political risks remain a medium-term headwind, with referendum concerns in Quebec and Alberta weighing on sentiment. Meanwhile, USD/CAD’s rally appears technically stretched, with bearish reversal signals and limited support seen between current levels and the 1.40 area.
Rally looks exhausted near 1.42
"The CAD is trading flat to the USD with markets offering no material reaction to domestic political developments and the result of the provincial election in Quebec."
"Risks for the CAD are two sided, as the minority win for the PQ has been delivered with the possibility of a governing majority with the Conservatives, however the medium-term risks are worrisome given the PQ leader’s promise to hold another secession referendum within his first four-year term – but after the end of the current US administration in order to avoid interference."
"The result heightens the importance and tightens the focus on the October 19 Alberta referendum, presenting a major sentiment related risk for the CAD. Risk reversals remain relatively muted at the moment."
"Bullish/neutral – the USD/CAD rally looks exhausted with a series of bearish reversal signals observed over the past several sessions. Shooting star doji’s are typically associated with bearish reversals, and the RSI looks extremely overbought around 80. USD/CAD has struggled above the mid-1.42s and we continue to see limited support between current levels and the psychologically important 1.40 level."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- AUD/USD gains 0.13% on Tuesday, supported by a modest weakening of the US Dollar.
- US Treasury yields remain close to their highest levels since 2002 despite an intraday pullback.
- Markets favor a Fed hold in October, while expectations for an Australian rate hike remain limited.
AUD/USD gains 0.13% on Tuesday and trades around 0.6980 at the time of writing. The Australian Dollar (AUD) benefits from a modest pullback in the US Dollar (USD), as easing US Treasury yields provide support to the pair.
The benchmark 10-year US Treasury yield trades around 5.29% after falling toward 5.25% earlier in the day. However, it remains close to Monday's peak of 5.349%, its highest level since 2002. US yields remain elevated amid persistent inflation risks, concerns over government debt and fiscal sustainability, and expectations that interest rates will remain high for longer.
Against this backdrop, the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, retreats to around 101.87 after reaching a fresh year-to-date high of 102.53 on Monday. The modest decline in Treasury yields is therefore temporarily reducing the appeal of the US Dollar.
On the monetary policy front, weaker-than-expected US data released last week has reduced pressure on the Federal Reserve (Fed) to raise interest rates again at its October 27-28 meeting. Softer Nonfarm Payrolls (NFP) and Personal Consumption Expenditures (PCE) inflation data have notably strengthened expectations that the US central bank will pause its tightening cycle in October.
According to the CME FedWatch tool, markets see roughly a 78% chance that the Fed will leave interest rates unchanged in October. Nevertheless, persistent inflationary pressures and the central bank's commitment to bringing inflation back toward its 2% target keep the possibility of another rate hike in December alive. Investors now await the Federal Open Market Committee (FOMC) Minutes on Wednesday for further clues about the path of US interest rates.
On the Australian side, expectations for further monetary tightening remain relatively modest. According to LSEG data, money markets see around a 20% chance that the Reserve Bank of Australia (RBA) will raise interest rates at its November meeting. The relatively low probability currently limits monetary policy support for the Australian Dollar, leaving AUD/USD primarily sensitive to movements in the US Dollar and US Treasury yields.
AUD/USD technical analysis
In the four-hour chart, AUD/USD trades at 0.6981, keeping a bearish near-term tone as it remains capped beneath both the 100-period simple moving average (SMA) at 0.7045 and the 200-period SMA at 0.7112. The pair is holding just above the horizontal support at 0.6965, while the Relative Strength Index (14) at 56.5 suggests a modest recovery in momentum that has yet to challenge the overhead moving-average barrier.
On the topside, initial resistance is located at 0.7020, followed by the 100-period SMA at 0.7045 and the next horizontal cap at 0.7075. Above there, the 200-period SMA at 0.7112 and the higher resistance at 0.7140 form a broader supply zone. On the downside, a break below 0.6965 would expose the next support level at 0.6900, where buyers may attempt to slow any deeper slide.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- EUR/USD advances as the US Dollar eases from its recent highs.
- US yields remain elevated, keeping the broader Dollar backdrop supportive.
- France’s fiscal uncertainty and cautious ECB signals cap the Euro’s recovery.
EUR/USD trades on the front foot on Tuesday, drawing support from a modest pullback in the US Dollar (USD). However, concerns over France’s fiscal position keep the Euro’s (EUR) gains in check. At the time of writing, the pair trades around 1.1255, up 0.29% on the day.
The US Dollar eases as Treasury yields retreat, although the benchmark 10-year yield has recovered most of its intraday decline. It trades around 5.29% after dipping toward 5.25% earlier in the day, remaining close to Monday’s peak of 5.349%, its highest level since 2002. US yields remain elevated as persistent inflation risks, concerns over government debt and fiscal sustainability, and expectations that interest rates will remain high for longer weigh on the bond market.
Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.87 after climbing to a fresh year-to-date high of 102.53 on Monday.
On the monetary policy front, softer-than-expected Nonfarm Payrolls (NFP) and Personal Consumption Expenditures (PCE) inflation data released last week have reduced pressure on the Federal Reserve (Fed) to raise rates at its October 27-28 meeting.
The CME FedWatch Tool shows roughly a 78% probability of a hold this month, although the Fed’s commitment to bringing inflation back toward its 2% target keeps a December rate hike in play. Traders now await the Federal Open Market Committee (FOMC) meeting minutes, due on Wednesday, for clues on the Fed’s next move.
According to TD Securities, the policy backdrop is no longer providing incremental support for the Dollar. The bank argues that “we have likely already seen the peak in market pricing for Fed hawkishness, and the Fed is unlikely to hike beyond what the market has already priced in,” limiting scope for further upside from expectations of tighter policy.
In their view, “recent US data shows the Fed also cannot hike rates at a more accelerated pace than once per quarter to give the USD the additional boost from tighter monetary policy channel,” reinforcing the notion that “it is hard for us to see persistently bullish USD signals from the US data/ Fed channel alone.”
On the European side, France’s public finances remain a near-term concern as the government faces a difficult task in securing support for its 2027 budget in a divided parliament.
Meanwhile, cautious remarks from European Central Bank (ECB) officials add uncertainty over further monetary tightening. Speaking on Tuesday, policymaker Olli Rehn said, “We have not seen inflation spread to non-energy prices or wages.” He added that high long-term interest rates are slowing growth and limiting the pass-through of energy costs to other prices and wages.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.36% | 0.11% | -0.24% | -0.09% | -0.37% | 0.05% | |
| EUR | 0.30% | -0.12% | 0.37% | 0.04% | 0.22% | -0.09% | 0.35% | |
| GBP | 0.36% | 0.12% | 0.50% | 0.15% | 0.32% | 0.03% | 0.48% | |
| JPY | -0.11% | -0.37% | -0.50% | -0.33% | -0.18% | -0.45% | -0.02% | |
| CAD | 0.24% | -0.04% | -0.15% | 0.33% | 0.15% | -0.14% | 0.31% | |
| AUD | 0.09% | -0.22% | -0.32% | 0.18% | -0.15% | -0.30% | 0.16% | |
| NZD | 0.37% | 0.09% | -0.03% | 0.45% | 0.14% | 0.30% | 0.46% | |
| CHF | -0.05% | -0.35% | -0.48% | 0.02% | -0.31% | -0.16% | -0.46% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Michael Wan at MUFG argues that Asian currencies have been more resilient than others, supported by strong AI-related exports and a less acute Oil and diesel supply situation in the region. He sees a good chance that Asia FX can outperform across various scenarios, though with dispersion across pairs. Previous concerns around FX carry unwinds in Latam have stabilised, reinforcing Asia’s relative appeal.
Resilient Asia FX with tech support
"Looking at Asia, it’s interesting that Asian currencies in general have been somewhat more resilient this time around relative to other currencies."
"We think this is due to AI exports remaining quite strong so far, while from an oil and oil product perspective especially diesel the supply situation in our region seems less acute relative to others."
"Concerns around unwinding of FX carry trades have earlier dominated markets and led to underperformance of Latam currencies but this has stabilised."
"Moving forward, we see a good chance that Asia FX can outperform across a range of scenarios but with some continued dispersion across key FX pairs."
"We like the tech-linked currencies such as TWD and KRW, and to a smaller extent MYR and SGD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities’ Macro Research team, led by Jayati Bharadwaj with contributions from Howard Du and Linda Cheng, argues that recent EUR/USD weakness has been driven by high Oil and diesel prices and French OAT concerns. They see sentiment stabilizing, expect near-term Euro pressure through October, but are fading the EUR/USD selloff via a 3‑month risk reversal expressing a bearish Dollar year-end view.
Euro pressured yet sentiment stabilizing
"We expect EUR to remain under near-term pressure as markets navigate key October dates and the Moody’s ratings review. While renewed fiscal concerns have weighed on EUR, the reaction remains relatively tame compared with the last episode of comparable OAT-Bunds widening."
"We therefore see scope for near-term EUR underperformance, but not a derailment of the broader trajectory beyond October, particularly if France can keep the 2027 deficit in the low-5% range and stress remains concentrated in OATs rather than becoming a systemic euro-area concern."
"Our trend-following framework suggests the USD rally was becoming stretched vs EUR, GBP, CAD, SEK and MXN. G10 FX positioning is also now broadly short vs the USD except for JPY."
"We prefer to fade the EUR/USD selloff than to chase it back to the pre-Liberation Day range. We entered a long EUR/USD trade via a 1.16/1.11 zero-cost risk reversal."
"We fade the EUR/USD selloff via risk reversal. We entered a 3m EUR/USD risk reversal (buy 1.1610-strike call funded by short 1.11-strike put) last week to express our bearish USD year-end forecast at attractive spot entry level."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Gold rebounds from a two-month low as US Treasury yields and the US Dollar ease.
- High-for-longer Fed expectations and elevated borrowing costs continue to cap the upside.
- The technical setup remains fragile, with $4,100 providing the first line of support.
Gold (XAU/USD) rebounds on Tuesday as a pullback in US Treasury yields weighs on the US Dollar (USD), helping the metal recover after falling to a two-month low of $4,104 during Asian trading hours. At the time of writing, XAU/USD trades around $4,151, up 0.29% on the day, after reaching an intraday high of $4,179.
The benchmark 10-year US Treasury yield eases to around 5.27% after touching 5.349% on Monday, its highest level since 2002. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, retreats toward 101.80 after reaching a fresh year-to-date high of 102.53 the previous day.
The pullback gives Gold some breathing room, although the rebound leaves its recent consolidation intact. The metal remains largely confined between $4,100 and $4,200, with buyers struggling to build a sustained recovery as yields hold near multi-year highs.
Elevated yields increase the opportunity cost of holding non-yielding metal and help keep demand for the US Dollar firm. Sticky inflation and a resilient US growth outlook reinforce expectations that interest rates will stay high for longer, while growing fiscal and government debt concerns add further upward pressure on borrowing costs.
Data released on Tuesday showed that ADP’s four-week average of weekly private-sector job gains rose to 23.75K from 22.5K. However, softer-than-expected US Nonfarm Payrolls (NFP) and Personal Consumption Expenditures (PCE) inflation data released last week have reduced pressure on the Federal Reserve (Fed) to raise interest rates at its October 27-28 meeting. The CME FedWatch Tool shows a 78% chance of a hold.
A pause in October offers near-term support for the yellow metal, but a broader recovery may remain difficult as markets anticipate further tightening. The Fed’s commitment to bringing inflation back toward its 2% target keeps the door open to a December rate hike.
The stalemate between the United States and Iran keeps energy-driven inflation risks elevated as Oil prices remain above pre-war levels. However, recovering Gulf exports and emergency reserve releases are weighing on Oil prices, with West Texas Intermediate (WTI) trading around $87, near one-month lows.
Against this backdrop, a stronger recovery in Gold would likely require a meaningful shift toward a less restrictive Fed outlook, accompanied by a sustained decline in Treasury yields and the US Dollar. Wednesday’s Federal Open Market Committee (FOMC) minutes could offer fresh insight into how officials view the need for further rate hikes.
Over the longer term, Gold remains supported as the same debt and fiscal concerns pushing borrowing costs higher also strengthen its appeal as a store of value. Meanwhile, strong central-bank demand and inflows into Gold-backed exchange-traded funds further underpin demand for the metal.
Technical analysis: XAU/USD remains bearish below mid-Bollinger SMA
On the daily chart, XAU/USD maintains a bearish near-term tone as it holds below the 20‑day Bollinger simple moving average (SMA) at $4,263. Momentum is soft, with the Relative Strength Index (RSI) hovering around 40, while the Moving Average Convergence Divergence (MACD) remains in negative territory, hinting that recent downside pressure is not yet exhausted despite a modest stabilization above nearby support.
On the downside, initial demand is seen near the psychological $4,100 level, closely aligned with the lower Bollinger Band around $4,087. A break below this area could expose the deeper horizontal support zone around $4,000-$3,950.
On the topside, a first cap emerges at the mid‑Bollinger SMA at $4,263, ahead of the upper band resistance near $4,439 and the charted horizontal barriers at $4,500 and $4,700, which together define a dense supply zone that gold would need to clear to shift the bias back to constructive.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Royal Bank of Canada’s (RBC) Nathan Janzen notes Canada’s trade balance swung to a $4.2 billion surplus in August, helped by higher energy prices and a rush of exports to the United States (US) ahead of new tariffs. He highlights strong energy exports, resilient non-tariffed trade flows, and improving domestic demand, while expecting limited broader economic spillovers and a gradual per-person recovery.
Trade surplus and tariff effects
"Canada's trade balance rose sharply to a $4.2 billion surplus in August, boosted by higher energy prices and a surge in exports ahead of new U.S. tariffs imposed late in the month."
"The monthly trade data is notoriously volatile, but looking ahead to September, energy prices continued to move higher with crude oil prices up another 16%. And global shortages of refined products are also driving Canadian energy exports higher -- refined product exports (like diesel) were up 13% excluding price impacts in August."
"Still, exports to the U.S. excluding tariffed products, and energy products rose ~16% by our count year-over-year."
"And domestic demand continues to show signs of life -- import volumes (excluding price impacts) fell by 1.7% but imports of machinery and equipment (a key indicator of business investment) and consumer goods (an indicator of consumer demand) both rose."
"We continue to expect the new tariffs imposed by the U.S. administration will have a significant impact on directly targeted sectors but with more than 80% of Canadian exports to the U.S. still maintaining duty free access under CUSMA we expect limited spillover to the broader economy."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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