Forex News
Austan Goolsbee, President of the Federal Reserve (Fed) Bank of Chicago, said that the April United States (US) Consumer Price Index (CPI) report was worse than they expected in comments reported by Reuters on Tuesday.
Key takeaways:
The April CPI report was worse than expected.
The worst part of April CPI is services inflation.
We have an inflation problem in this country.”
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 British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.46% | 0.68% | 0.25% | 0.27% | 0.36% | 0.30% | 0.51% | |
| EUR | -0.46% | 0.21% | -0.17% | -0.22% | -0.11% | -0.18% | 0.05% | |
| GBP | -0.68% | -0.21% | -0.40% | -0.44% | -0.33% | -0.38% | -0.16% | |
| JPY | -0.25% | 0.17% | 0.40% | -0.02% | 0.07% | 0.03% | 0.23% | |
| CAD | -0.27% | 0.22% | 0.44% | 0.02% | 0.09% | 0.04% | 0.24% | |
| AUD | -0.36% | 0.11% | 0.33% | -0.07% | -0.09% | -0.04% | 0.16% | |
| NZD | -0.30% | 0.18% | 0.38% | -0.03% | -0.04% | 0.04% | 0.20% | |
| CHF | -0.51% | -0.05% | 0.16% | -0.23% | -0.24% | -0.16% | -0.20% |
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).
- Hotter-than-expected US inflation supports the US Dollar and weighs on Silver on Tuesday.
- Geopolitical concerns surrounding tensions between the US and Iran continue to support precious metals.
- Commerzbank and OCBC highlight support from industrial demand and persistent risks of high volatility in the Silver market.
Silver (XAG/USD) declines on Tuesday, stalling a four-day winning streak, trading around $84.10 at the time of writing, down 2.18% on the day. The pullback comes as the US Dollar (USD) benefits from renewed demand following stronger-than-expected US inflation data, which is also pushing US Treasury yields higher.
The Bureau of Labor Statistics (BLS) reported that inflation, as measured by the Consumer Price Index (CPI), accelerated to 3.8% YoY in April from 3.3% previously, above market expectations of 3.7%. On a monthly basis, the index rose 0.6%, in line with forecasts. Core inflation, which excludes food and energy prices, increased to 2.8% YoY from 2.6% previously, also exceeding expectations of 2.7%.
The BLS noted that “the index for energy rose 3.8 percent in April, accounting for over 40 percent of the monthly all items increase.” Shelter and food costs also increased, reinforcing concerns about persistent inflationary pressures in the United States (US).
Meanwhile, the ADP report showed that US private employers added an average of 33K jobs per week over the four weeks ending April 25, slightly above the previous reading, suggesting a modest improvement in labor market momentum.
Against this backdrop, the US Dollar Index (DXY) rises toward 98.30 following the release, as investors assess that the Federal Reserve (Fed) may keep interest rates higher for longer. A prolonged high-interest-rate environment generally reduces the appeal of non-yielding assets such as Silver.
The Greenback continues to benefit also from support linked to geopolitical tensions. Concerns surrounding the Middle East remain elevated after US President Donald Trump stated that the US-Iran ceasefire was “on life support.” According to CNN, several members of his administration are reportedly considering the possibility of resuming major military operations more seriously.
However, Commerzbank highlighted that Silver remains supported by the strength of industrial metals. The bank noted that the metal recently reached a two-month high near $87 per troy ounce, driven by gains in the London Metal Exchange index and concerns over potential production disruptions in Peru linked to an energy crisis.
Meanwhile, OCBC stated that the recent Silver rally has been driven by momentum, short-covering and expectations of a possible easing in trade tensions between the United States (US) and China. The bank also pointed out that the Silver Institute projects a sixth consecutive annual market deficit this year, reinforcing the narrative of structural supply tightness.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- EUR/USD falls as hotter-than-expected US inflation data lifts the US Dollar and Treasury yields.
- Traders increase bets that the Federal Reserve could keep interest rates higher for longer.
- Rising energy costs fuel ECB tightening expectations, though growth concerns continue to weigh on the Euro.
The Euro (EUR) trades under pressure against the US Dollar (USD) on Tuesday as hotter-than-expected US inflation data strengthens the Greenback and pushes US Treasury yields higher. At the time of writing, EUR/USD is trading around 1.1743, down roughly 0.35% on the day.
Data released by the Bureau of Labor Statistics showed the headline Consumer Price Index (CPI) rose 0.6% MoM in April after increasing 0.9% in March, matching market expectations. On an annual basis, inflation accelerated to 3.8% from 3.3% previously, above forecasts of 3.7%.
Meanwhile, core CPI, which excludes volatile food and energy prices, rose 0.4% MoM, up from 0.2% in March and above expectations of 0.3%. Annual core inflation climbed to 2.8% from 2.6%, also exceeding forecasts of 2.7%.
US inflation accelerated for a second consecutive month in April, largely driven by higher energy prices as Oil remained elevated amid disruptions in the Strait of Hormuz.
The stronger-than-expected inflation data, combined with last week’s upbeat Nonfarm Payrolls (NFP) report, reinforced expectations that the Federal Reserve (Fed) could keep interest rates higher for longer.
According to the CME FedWatch Tool, traders currently expect the Fed to keep interest rates unchanged in the coming months, while also increasing bets on a possible rate hike later this year. The probability of a rate hike at the September meeting currently stands near 13.5%, rising to around 32% for the December meeting.
Rising hawkish Fed expectations and ongoing uncertainty surrounding US-Iran negotiations are helping the US Dollar rebound from recent lows. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 98.37, up roughly 0.35% on the day.
In the Eurozone, traders are pricing in at least two rate hikes from the European Central Bank (ECB) this year as rising energy prices continue to fuel inflation risks. However, the Eurozone’s heavy exposure to higher energy costs is also fueling concerns about slower economic growth, which could limit the ECB’s ability to tighten policy aggressively.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
ING’s Francesco Pesole highlights rising political uncertainty in the UK as calls grow for Prime Minister Keir Starmer’s resignation, with betting markets seeing a high chance he leaves office this year. He notes emerging political risk premium in EUR/GBP and warns sterling could face further pressure as markets assess leadership contenders and fiscal-rule credibility.
Sterling pressured by UK political turmoil
"The pound started coming under pressure yesterday afternoon (after a strong session) as calls for Starmer’s resignation intensified. For the first time in a long time, some political risk premium seems to be emerging in EUR/GBP."
"That is, however, still small according to our model, around 0.3% short-term overvaluation."
"The pound has plenty of additional room to build a negative premium, with markets likely to shift their focus to which candidate holds the best chance of replacing Starmer."
"Notably, sterling came under pressure recently following reports that Burnham could seek a parliamentary seat to advance a leadership bid, reflecting concerns that his views on abandoning the fiscal rule could undermine a key anchor of market confidence in UK public finances."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The Energy Information Administration (EIA) released the Monthly Energy Review on Tuesday. The report showed that the US hit a record energy production in 2025, recording a 3.4% increase from the previous record set in 2024.
Source: EIA
“Total production was driven by record-high production in natural gas, crude oil, natural gas plant liquids (NGPLs), and renewables. This was the fourth consecutive year in which the United States set a record for total energy production.”
Regarding Crude Oil, production set a record of 13.6 million barrels per day, up 3% from a year earlier.
Market implications
The US shifted from importing crude to exporting Oil and derivatives in little over a decade. Imports continue, but the trade balance is positive. Record production year after year suggests the peak is yet to be reached.
The scenario would be perfect if it weren’t for the ongoing war in the Middle East. Crude Oil prices are at levels not seen since 2021, a major source of inflation-related concerns. Supply disruptions in the Persian Gulf have fueled demand for US Oil, which may temporarily boost the country’s energy trade balance surplus, but have long-term negative implications. The most obvious is potential interest rate hikes, which usually translate into higher borrowing costs and hence, reduced investment, harming growth.
Commerzbank's Commodity Analyst Barbara Lambrecht notes that Silver has surged to a two-month high near USD 87 per troy ounce, supported by strength in industrial metals and a record high London Metal Exchange index. The bank highlights reports of potential energy-crisis-related disruptions in Peru, a major Silver producer, as an additional driver. However, Commerzbank warns investors about high volatility and cautions against excessive optimism.
Industrial demand and supply concerns
"Silver even surged significantly yesterday and briefly traded at USD 87 per troy ounce today, a two-month high."
"The impulse for the relative strength of silver, which is more heavily influenced by industrial demand than gold, is likely to stem from the industrial metals markets."
"The London Metal Exchange index climbed to a new record high yesterday."
"According to the report, Peru could declare an emergency decree due to the energy crisis, which could also affect the production of key metals."
"However, we caution against excessive optimism and point to the high volatility in the silver market."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold trades on the defensive on Tuesday as a stronger US Dollar and hotter-than-expected US inflation data weigh on the precious metal.
- US inflation accelerated in April, reinforcing expectations that the Federal Reserve could keep interest rates higher for longer.
- Technically, XAU/USD remains capped below the 100-day SMA, with RSI and ATR signaling subdued momentum and moderating volatility.
Gold (XAU/USD) trades under pressure on Tuesday as fading hopes for a near-term breakthrough in US-Iran negotiations and hotter-than-expected US inflation data support the US Dollar (USD). At the time of writing, XAU/USD is trading around $4,705 after hitting a three-week high of $4,773 during the Asian session.
US consumer inflation accelerated in April, largely driven by higher energy prices as Oil remained elevated amid disruptions around the Strait of Hormuz. Data released by the Bureau of Labor Statistics showed the headline Consumer Price Index (CPI) rose 0.6% MoM in April after increasing 0.9% in March, matching market expectations, while annual inflation accelerated to 3.8% from 3.3% previously, above forecasts of 3.7%.
Meanwhile, core CPI, which excludes volatile food and energy prices, rose 0.4% on a monthly basis, up from 0.2% in March and above expectations of 0.3%. On an annual basis, core inflation climbed to 2.8% from 2.6%, also exceeding forecasts of 2.7%.
The stronger-than-expected inflation data reinforced expectations that the Federal Reserve (Fed) may keep interest rates higher for longer or even consider rate hikes, pushing US Treasury yields higher. A higher interest rate environment reduces the appeal of non-yielding assets like Gold because the precious metal does not offer any yield or interest.
According to the CME FedWatch Tool, traders currently expect the Fed to keep interest rates unchanged for the remainder of the year. However, markets still price in a modest chance of a rate hike at the December meeting, with the probability standing near 36%.
US-Iran negotiations remain at an impasse over Iran’s nuclear program. US President Donald Trump told reporters in the Oval Office on Monday that the ceasefire is “on massive life support.” The remarks came after Trump rejected Iran’s latest response to the US-backed peace proposal, calling it “totally unacceptable.”
Reports also suggest that the US President is considering a resumption of military operations, alongside a potential restart of “Project Freedom” in the Strait of Hormuz. Meanwhile, Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that Tehran is prepared to respond to “any aggression,” adding that their move would leave the US “surprised.”
Technical analysis: XAU/USD struggles below 100-day SMA
On the daily chart, XAU/USD holds in a neutral near-term stance between its major moving averages. The price remains comfortably above the 200-day Simple Moving Average (SMA) at $4,328, preserving the broader bullish structure, yet it is capped beneath the 100-day SMA around $4,785, which acts as the immediate topside barrier.
The Relative Strength Index (RSI) sits just below the 50 line, hinting at a lack of clear directional momentum, while the Average True Range (ATR) has eased toward $113, suggesting volatility is moderating as Gold consolidates within this mid-range band.
On the downside, initial support is seen at the horizontal floor around $4,500, with the longer-term 200-day SMA near $4,328 reinforcing a deeper demand zone if selling pressure resumes.
On the topside, resistance is first aligned at the 100-day SMA near $4,785, ahead of the more prominent horizontal barrier around $4,850. A sustained break above this cluster would be needed to revive bullish continuation, whereas a failure to clear it would keep XAU/USD confined to its current range.
(The technical analysis of this story was written with the help of an AI tool.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- US inflation accelerates to 3.8% in April, above market expectations of 3.7%.
- Donald Trump’s comments about the US-Iran ceasefire fuel risk aversion and support the US Dollar.
- British Pound remains under pressure amid rising political uncertainty in the UK ahead of GDP data.
GBP/USD declines around 1.3525 on Tuesday at the time of writing, down 0.62% on the day, as the US Dollar (USD) benefits from renewed demand following stronger-than-expected US inflation data and a more cautious market mood.
The Bureau of Labor Statistics (BLS) reported on Tuesday that inflation, as measured by the Consumer Price Index (CPI), accelerated to 3.8% YoY in April from 3.3% previously, above market expectations of 3.7%. On a monthly basis, the index increased by 0.6%, in line with forecasts. Core inflation rose to 2.8% annually from 2.6%, surpassing the 2.7% forecast.
At the same time, weekly ADP data showed that US private employers added an average of 33K jobs per week over the four weeks ending April 25, signaling a slight improvement in labor market momentum.
The data support the US Dollar, as investors assess that more persistent inflation could limit the Federal Reserve’s (Fed) room to ease monetary policy in the coming months. The US Dollar Index (DXY) therefore rises toward 98.30 following the release.
The Greenback is also benefiting from renewed safe-haven demand. Market sentiment deteriorated after United States (US) President Donald Trump stated that the US-Iran ceasefire is “on life support.” According to CNN, several members of his administration are now reportedly considering the possibility of resuming major military operations more seriously, reviving geopolitical concerns.
On the other side, the British Pound (GBP) remains pressured by mounting political tensions surrounding UK Prime Minister Keir Starmer following Labour Party's heavy losses in local elections. According to several reports, 78 Labour Members of Parliament have called for Starmer to step down, close to the threshold required to trigger a formal leadership challenge.
Reuters also reports that markets fear a potential successor could adopt a more expansionary fiscal policy stance, which could further deteriorate the United Kingdom’s (UK) public finances. ING noted that a political risk premium is beginning to emerge for GBP, while Commerzbank believes that a chaotic political transition could add further pressure on the British currency.
Investors are now awaiting the preliminary UK Gross Domestic Product (GDP) figures for the first quarter, as well as Industrial Production and Manufacturing Production data due on Thursday.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.32% | 0.58% | 0.22% | 0.21% | 0.29% | 0.14% | 0.34% | |
| EUR | -0.32% | 0.25% | -0.09% | -0.14% | -0.04% | -0.20% | 0.02% | |
| GBP | -0.58% | -0.25% | -0.36% | -0.40% | -0.30% | -0.45% | -0.24% | |
| JPY | -0.22% | 0.09% | 0.36% | -0.04% | 0.04% | -0.10% | 0.09% | |
| CAD | -0.21% | 0.14% | 0.40% | 0.04% | 0.09% | -0.06% | 0.13% | |
| AUD | -0.29% | 0.04% | 0.30% | -0.04% | -0.09% | -0.14% | 0.04% | |
| NZD | -0.14% | 0.20% | 0.45% | 0.10% | 0.06% | 0.14% | 0.19% | |
| CHF | -0.34% | -0.02% | 0.24% | -0.09% | -0.13% | -0.04% | -0.19% |
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).
- Indian Prime Minister Narendra Modi urges citizens not to buy Gold for a year to save foreign exchange.
- Modi’s pledge comes along with other cost-cutting recommendations as the country struggles with high Oil prices.
- Analysts don’t expect the announcement to significantly hit demand for Gold.
Indian Prime Minister Narendra Modi urged the nation’s citizens to avoid buying Gold for a year, in an effort to cut spending and save foreign exchange as the country grapples with the macroeconomic consequences of the Iran war.
“For a year, be it any function, we shouldn’t buy Gold jewelry,” Modi said on Sunday, according to Bloomberg, along with other announced cost-cutting measures such as fuel conservation, increasing working from home or limiting overseas trips.
Modi’s recent call is significant because India (along with China) is the world’s largest consumer of Gold. Prices of the precious metal haven’t moved significantly in response to the news, as it is unclear if Indians will follow these recommendations, but shares of Indian jewelers fell sharply afterwards.
Indian Gold demand stood at 151 tonnes in the first quarter of 2026, marking a 10% year-on-year increase, driven by a 54% surge in investment, according to the World Gold Council (WGC).
Still, while the commodity’s total demand rose, that for jewelry dropped 19% due to record-high prices, the data shows. Spending, however, surged to a record high, underscoring resilient consumer demand but also adding to Modi’s worries:
India, along with many other Asian countries, is facing the consequences of the prolonged conflict in the Middle East. The Iran war has sent Oil prices surging, and India imports almost 90% of its crude needs. The spike in prices is expected to deteriorate the country’s balance of trade and, to make matters worse, the Indian Rupee’s (INR) record low against the US Dollar (USD) is making imports even more expensive, as seen on the USD/INR daily chart below.
Gold is considered one of the safest stores of wealth for Indians. Apart from its value as a financial asset, the precious metal is deeply embedded in the local culture as it’s seen as an auspicious present for weddings and plays a central role in many religious and regional festivals.
Jateen Trivedi, Vice President and Research Analyst for Commodity and Currency at LKP Securities, told the Indian business newspaper The Economic Times that Modi’s appeal is unlikely to materially alter India’s long-term appetite for Gold, given how deeply the metal is embedded in savings behavior, investments and cultural buying patterns. Still, he added that the comments could temporarily slow discretionary purchases.
Modi's words may slow short-term Gold purchases, but India's deep cultural and financial ties to the precious metal are unlikely to change. The government's push to save foreign exchange seeks to alleviate the country’s economic pressures, but the underlying issue – high energy prices – is unlikely to be resolved by buying less Gold.
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.
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