Forex News
- Gold price edges higher to near $4,235 in Thursday’s early Asian session.
- Federal Reserve cut the interest rates by 25 bps at its December meeting on Wednesday.
- Donald Trump set a deadline for the Ukraine peace deal.
Gold price (XAU/USD) gains momentum to around $4,235 during the early Asian session on Thursday. The precious metal extends its upside after the US Federal Reserve (Fed) delivered an expected third consecutive interest rate cut and maintained its outlook for just one cut in 2026. Traders will keep an eye on the US weekly Initial Jobless Claims report later on Thursday.
The US Fed decided to lower its key lending rate by 25 basis points (bps), bringing it in a range of 3.50% to 3.75%. This marks its lowest level in three years. Fed Chair Jerome Powell said during the press conference that policymakers need time to see how the Fed's three cuts this year work their way through the US economy.
Powell added that the Fed officials will closely examine incoming data leading up to the Fed's next meeting in January. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. Markets are currently pricing in nearly a 78% chance that the Fed will hold interest rates steady next month, compared with a 70% probability just before the rate cut announcement, according to the CME FedWatch tool.
US President Donald Trump told Ukrainian President Volodymyr Zelensky that he has until Christmas to accept his deal to end the war with Russia, per the Telegraph. Meanwhile, Zelensky said he is finalizing a revised peace proposal that he will deliver to the US soon, hinting at potential progress as Trump increases pressure on Kyiv to agree to a peace deal with Moscow. Any signs of progress in the Ukraine peace deal could undermine a traditional safe-haven asset like Gold in the near term.
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.
- GBP/USD launched back into the bullish side on Wednesday.
- The Fed delivered a third straight interest rate cut as many investors expected.
- Markets are brushing off the Fed’s cautious tone to bet on further rate cuts.
- Pound flows remain bolted to broad-market dynamics until next week’s UK data dump.
GBP/USD punched a fresh hole into seven-week highs on Wednesday, rising back into the 1.3400 neighborhood after the Federal Reserve (Fed) delivered a widely expected third straight interest rate cut. Fed Chair Jerome Powell gave a particularly cautious showing, hinting that the Fed could be poised for another extended “wait and see” period. Global markets largely brushed off the Fed head’s warnings, and rate markets are already pricing in a faster pace of rate cuts over the next two years than the Fed itself expects.
Although the Fed projected only one cut for next year, Chair Jerome Powell signaled that rate hikes are essentially off the table, a stance traders welcomed. Futures markets reacted immediately, pricing in a strong chance of two or more cuts in 2026. Stocks had drifted sideways heading into this final meeting of the year, but the Fed’s decision aligned with expectations and helped stabilize sentiment.
The remainder of the week is largely lacking in meaningful economic events, but that all ends next week. Cable traders will be staring down the barrel of four straight days of high-impact data releases from next Tuesday, starting with the latest rolling three-month UK labor statistics and global Purchasing Managers Index (PMI) survey results. Wednesday brings the latest UK Consumer Price Index (CPI) inflation figures, and the real calendar-rattler will be the Bank of England’s (BoE) latest interest rate call, slated for Thursday. UK Retail Sales figures are trailing behind the BoE, and will close out the week’s UK data docket on Friday.
GBP/USD daily chart
widely expected
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- USD/JPY falls to around 156.00 in Thursday’s early Asian session.
- The Fed cut interest rates in December but signaled a pause at the next policy meeting.
- Fiscal concerns in Japan could weigh on the Japanese Yen and cap the pair’s downside.
The USD/JPY pair tumbles to near 156.00 during the early Asian session on Thursday. The US Dollar (USD) weakens against the Japanese Yen (JPY) after the Federal Reserve (Fed) lowered interest rates in a widely expected move. The US weekly Initial Jobless Claims data are due later on Thursday.
The Federal Open Market Committee (FOMC) voted 9-3 on Wednesday to lower the benchmark federal funds rate by 25 basis points (bps) to a range of 3.5%-3.75%. The Greenback edges lower against its rivals immediately after the Fed's announcement. Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid argued that the policy rate should be held steady, while Fed Governor Stephen Miran again advocated for a jumbo reduction.
Fed Chair Jerome Powell said that the reduction puts the central bank in a comfortable position as far as rates go. “We are well positioned to wait and see how the economy evolves,” said Powell. The CME FedWatch tool showed fed funds futures are pricing in a more than 77% probability that the US central bank would slash rates two more times next year.
On the other hand, Japan’s Prime Minister Sanae Takaichi has a pro-growth agenda, which is seen by markets as a signal for potential fiscal stimulus and looser financial conditions. Concerns about expansionary fiscal measures in Japan and growth worries could exert some selling pressure on the JPY and act as a tailwind for the pair.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- The Canadian Dollar climbed 0.4% against the US Dollar on Wednesday.
- The Loonie is hitting its stride against a weakening Greenback, testing 11-week highs.
- A third straight Fed rate cut plus no rate moves from the BoC bolstered the Canadian Dollar.
The Canadian Dollar (CAD) found fresh 11-week highs against the US Dollar (USD) on Wednesday. The Bank of Canada (BoC) held interest rates steady, while the Federal Reserve (Fed) delivered its third straight interest rate cut, propping up the Loonie and sending the Greenback lower.
The BoC held rates flat once again, with BoC Governor Tiff Macklem reiterating patience-based rhetoric that pushed back on market expectations for possible interest rate cuts in the future. Despite markets clamoring for cheaper funding costs through lower interest rates, the BoC remains leery of dropping interest rates any further.
The Fed delivered a third straight interest rate cut, giving investors what they wanted, however Fed Chair Jerome Powell cautioned against expectations for further rate moves in the near term, with the Federal Open Market Committee (FOMC) broadly seeing room for only 50 basis points in further rate reductions across 2026 and 2027.
Daily digest market movers: Canadian Dollar climbs on Fed rate cuts
- The Canadian Dollar’s midweek gains pushed the USD/CAD pair into an eleven-week low, testing below 1.3800 for the first time since September.
- The BoC held interest rates at 2.25%, while the Fed eased its policy rate band to 3.75-4.00%.
- The Fed also announced an uptick in Quantitative Easing (QE) programs including bond purchasing.
- The BoC’s stubborn rate announcement comes the week before key Canadian Consumer Price Index (CPI) inflation figures are due. Next Monday, Loonie traders will get to see how right the BoC was to keep rates on hold.
- Despite a third straight interest rate cut, Fed Chair Jerome Powell cautioned markets against hoping for any further extreme moves from the Fed, at least as long as he’s still the Chair, which ends early next year.
Canadian Dollar price forecast
From the momentum perspective, USD/CAD is showing clear downside pressure. Price has broken below both the 50-day and 200-day EMAs, and the recent candles indicate strong bearish follow-through after the rejection near the 1.41 resistance zone. Momentum indicators support this shift: RSI has fallen into the mid-40s and continues trending lower, signaling weakening bullish strength, while Stochastics sits near oversold levels but has not yet shown a decisive bullish crossover. This combination typically reflects a market where sellers remain in control, even if short-term bounces occur.
The next key level visible on the chart is the support zone around 1.379–1.372, highlighted by the recent low and historical price reactions. A sustained break below that range would signal continued trend weakness, while a stabilization above it—paired with a momentum reversal on RSI or Stochastics—would hint at potential consolidation rather than a full trend shift. For now, momentum remains tilted to the downside, and traders often watch for whether oversold indicators start firming up or whether price continues to accelerate lower.
USD/CAD daily chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- EUR/USD climbs to daily highs, consolidating between 1.1650 and 1.1700.
- Federal Reserve cuts rates by 25 basis points, sparking broad Dollar sell-off.
- Powell says policy is now neutral, with future moves dependent on economic data.
EUR/USD surged over 0.59% on Wednesday as the Federal Reserve cut rates as expected, in a perceived “dovish hold” which prompted traders to ditch the Dollar and buy the shared currency. At the time of writing, the pair trades near daily highs of 1.1695, after bouncing off daily lows of 1.1620.
Dollar weakens as Powell signals pause, Euro advances on bullish momentum
Earlier, the Fed reduced rates by 25 basis points, with three dissenters including Governor Stephen Miran, who preferred a 50-basis-point cut. Two Regional Fed Presidents, Jeffrey Schmid and Austan Goolsbee, voted to maintain current rates.
The monetary policy statement remained largely unchanged, noting that employment risks lean toward the downside while inflationary pressures continue to be elevated. Fed Chair Jerome Powell acknowledged this tension between the central bank’s dual mandate during his press conference.
Across the pond, in the Eurozone the docket was empty, yet European Central Bank (ECB) member Makhlouf said that he is confident that inflation in the medium-term will be at 2%, according to Bloomberg.
Earlier, ECB President Christine Lagarde said that policy is in a good place and that the bank could upgrade their projections in December.
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.39% | -0.39% | 0.47% | -0.27% | -0.51% | -0.69% | -0.49% | |
| EUR | 0.39% | 0.03% | 0.89% | 0.16% | -0.07% | -0.26% | -0.06% | |
| GBP | 0.39% | -0.03% | 0.88% | 0.13% | -0.10% | -0.29% | -0.09% | |
| JPY | -0.47% | -0.89% | -0.88% | -0.72% | -0.95% | -1.13% | -0.93% | |
| CAD | 0.27% | -0.16% | -0.13% | 0.72% | -0.22% | -0.42% | -0.22% | |
| AUD | 0.51% | 0.07% | 0.10% | 0.95% | 0.22% | -0.19% | 0.00% | |
| NZD | 0.69% | 0.26% | 0.29% | 1.13% | 0.42% | 0.19% | 0.20% | |
| CHF | 0.49% | 0.06% | 0.09% | 0.93% | 0.22% | -0.01% | -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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: Euro’s advance as Powell weakens the Dollar
- The US Dollar Index (DXY) edges lower, down 0.58% to 98.68, as the Greenback weakens broadly against major peers.
- Powell stated that the central bank is “well positioned” to “wait and see” how the economy develops, following a total easing of 75 basis points this year. He mentioned that the Fed funds rate is near the upper end of estimates for neutrality and that they will await economic data, which may be “distorted.”
- After cutting rates by 175 basis points, Powell said, “we have moved our policy back down to a level that is certainly not strongly restrictive at this point,” adding, “I think it is sort of in the range of neutral.”
- The Summary of Economic Projections (SEP) included the “dot plot,” indicating that most members expect the fed funds rate to be around 3.4% next year, suggesting a possible 25 basis point cut. For the longer term beyond 2028, Fed policymakers anticipate neutral rates near 3%.
Technical analysis: EUR/USD rangebound below 1.1650, eyes on FOMC meeting
EUR/USD hovers around 1.1650 for a sixth consecutive session, carving out a narrow consolidation band between 1.1650 and 1.1600. Momentum seems to remain bullish, as depicted by the Relative Strength Index (RSI), but buyers need to reclaim 1.1700 so they can challenge 1.1800 and the year-to-date high at 1.1918.
On the flip side, if EUR/USD tumbles below 1.1650, the 50-day Simple Moving Average (SMA) is near 1.1604. A decisive break beneath this zone would expose the 20-day SMA at 1.1599, followed by the 1.1500 psychological level.
(This story was corrected on December 10 at 19:00 GMT to fix in the first bullet point the date of the Fed meeting and to correct the surname of the Fed Governor Christopher Waller)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Gold price climbs nearly 0.50% after Federal Reserve’s expected rate cut.
- Split Fed vote reveals policy uncertainty; Powell maintains a neutral outlook.
- Monetary statement highlights employment risks and persistent inflation pressures.
Gold (XAU/USD) registered gains of nearly 0.50% on Wednesday as the Federal Reserve cut rates by 25 basis points as expected, split with a 9 to 3 split vote, followed by the Chair Jerome Powell press conference, in which he struck a neutral stance. XAU/USD trades at $4,227 after bouncing off daily lows of $4,182.
Fed’s 25-basis-point rate cut lifts gold; Powell signals cautious optimism
Earlier, the Fed cut rates 25 bps with three dissenters being Governor Stephen Miran who opted for a 50-bps cut. Two Regional Fed Presidents, Jeffrey Schmid and Austan Goolsbee voted to keep rates steady.
The monetary policy statement was almost unchanged as it highlighted that employment risks are tilted to the downside, while inflation pressures continued to remain high. This was acknowledged by the Fed Chair Jerome Powell at his press conference, saying that there’s tension between the central bank’s dual mandate.
Daily digest market movers: Gold rallies on Fed’s dovish stance
- US Treasury yields are diving, with the 10-year benchmark note rate down three and a half basis points at 4.155%. US real yields, which correlate inversely with Gold prices, falls three and a half basis points to 1.895%, a tailwind for Bullion.
- The US Dollar Index (DXY), which tracks the Greenbacks’ performance against a basket of six peers, is down 0.58% to 98.65.
- Fed Chair Jerome Powell said that the central bank is “well positioned” to “wait and see” how the economy evolves, after easing policy 75 basis points this year. He added that the Fed funds rate is within the upper range of estimates for neutrality and that they will wait for economic data, which could be “distorted”.
- Powell said that after 175 basis points of cuts, “we have moved back our policy back down to where it is certainly not strongly restrictive at this point,” he said. “I think it is sort of in the range of neutral.”
- The Summary of Economic Projections (SEP) revealed the “dot-plot” which showed that most members hinted that the fed funds rates for the next year would be at around 3.4%, implying that policymakers could cut 25 bps next year. For the longer term beyond 2028, Fed policymakers see neutral rates at around 3%.
Technical Analysis: Gold hovers around $4,200 amid dull session
Gold’s technical picture suggests that the uptrend might continue, but a slightly hawkish Fed could prompt traders to sell the yellow metal below the $4,200 milestone. Although momentum remains bullish, as shown by the Relative Strength Index (RSI), Bullion’s downside risks remain.
If XAU/USD drops below $4,200, the next support would be the 20-day Simple Moving Average (SMA) at $4,153, followed by the 50-day SMA at $4,090 and the $4,000 mark. On the flip side, if the Fed is dovish, Bullion could skyrocket towards $4,300 ahead of the record high of $4,381.
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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