Chart Of The Day: Why Gold Is Headed Lower After Moving In Sync With The Dollar – Investing.com
- Date: 04-Nov-2021
- Source: Investing.com
- Sector:Financial Markets
- Country:Middle East
Chart Of The Day: Why Gold Is Headed Lower After Moving In Sync With The Dollar – Investing.com
Accepted wisdom has it that generally possesses a negative correlation to the . So when the USD rises, the yellow metal usually falls. However, over the past two days, the precious metal has been moving in tandem with the currency.
The USD declined 0.27% on Wednesday, after the Federal Reserve policy meeting, when Chairman Jerome Powell that trimming stimulus, via tapering bond purchases, does not equate to increasing interest rates. Cutting the Fed's bond-buying program was already priced in, and when the Fed's outlook for higher interest rates sprawled out to 2024, dollar bulls closed positions.
However, despite the dollar selloff yesterday, gold dropped a whopping 1.4%. That's because on Wednesday, yields surged over five basis points, as bonds were more attractive than non-yielding gold contracts.
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