- Troy ounce of gold gains more than $50 this week.
- 10-year US Treasury bond yield continues to push lower.
- US Dollar Index erases daily gains as Trump continues to attack Fed.
After closing the previous day with small gains, the XAU/USD pair gathered momentum on Wednesday and jumped to its highest level in more than six years at $1499. As of writing, the pair was up 1.6% on a daily basis at $1498 and was adding more than $50 since the start of the week.
The precious metal continues to find demand as a safer alternative to currencies as major central banks turn dovish amid concerns over a global economic slowdown. In a surprise decision today, the Reserve Bank of New Zealand cut its policy rate by 50 basis points, the Reserve Bank of India lowered the repo rate by 35 basis points and the Bank of Thailand slashed its policy rate by 25 basis points.
Trump urges Fed to cut rates
Commenting on that matter, US President Donald Trump noted that three more central banks cut rates today and called upon the Federal Reserve to cut rates “bigger and faster” and to stop their “ridiculous quantitative tightening.” After posting modest recovery gains earlier in the day, the US Dollar Index lost its traction on these remarks and was last down 0.08% on the day at 97.50. Moreover, the 10-year US Treasury bond yield extended its decline and is now losing more than 6% on the day at 1.633%, fueling the pair’s rally.
Meanwhile, the S&P 500 Futures is now down more than 1% on the day, suggesting that major equity indexes in the US are likely to open deep in the negative territory, which could provide an additional boost to the pair.
Later in the session, Chicago Fed President Evans will deliver a speech and the Federal Reserve will publish its Consumer Credit Change data that is expected to edge lower to $16 billion in June from $17.09 billion in May.
Technical levels to watch for
Share
