Commodities Analysis by Fawad Razaqzada covering: EUR/USD, XAU/USD, US Dollar Index Futures, Gold Futures. Read Fawad Razaqzada's latest article on Investing.com
Gold rallied on Friday, ending a three-week losing streak despite a strong US dollar.This turmoil also affected European indices, causing losses between 1.5% and 3.2%, and increased the appeal of gold as a safe-haven asset, especially as the spread between
At the start of this week, though, we have seen a bit of a rebound for European indices while gold has started on the back foot. But in light of last week’s mild recovery, and the drop in bond yields, the precious metal may be about to resume higher.Gold has been a preferred hedge against inflation in recent years, maintaining its value despite high interest rates and attractive government bond returns. Although global inflation has eased, the disinflation process is slow.
High inflation and wage data could delay policy normalization, affecting gold's appeal. Major central banks, such as the European Central Bank and Swiss National Bank, have begun cutting rates, with others like the Bank of England and US Federal Reserve expected to follow. It continues to be a favoured hedge against inflation, maintaining its value despite high interest rates and eased inflation. Future rate cuts by major central banks may further boost gold prices. Technical analysis shows gold in a consolidation phase, with important support holding firm.Be sure to check out InvestingPro to stay in sync with the market trend and what it means for your trading. As with any investment, it's crucial to research extensively before making any decisions.
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