Yesterday morning, gold dropped to a ten-week low, trading briefly below $4,269. It managed to recoup some of its losses as the day progressed, but was unable to break above resistance around $4,350. The rally came after the US dollar gave back a slug of Friday’s gains. This was helped along by reports that Iran and Israel had halted attacks against one another after an appeal from President Trump.
Source: TN Trader
Mr Trump went on to insist that negotiations between the US and Iran were progressing very quickly and were entering the home stretch. He suggested that the talks could be wrapped up soon, leading to the reopening of the Strait of Hormuz in a few days.
If so, then it will be interesting to watch the US dollar, which has rallied on the back of the crisis. This has weighed on gold. Could an end to the war see these positions reversed? Investors are now awaiting this week’s US CPI and PPI reports, which are expected to provide further insight into the Federal Reserve’s policy outlook.
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