The commodity managed to extend its gains this week as the dollar continues to perform weaker today, the U.S. currency even traded lower against the euro. Looking at the dollar’s performance today, the currency is currently hovering at a two-month low against the euro.
The hawkish tone that disappeared after the most recent Fed meeting took a huge toll against the dollar bullish performance on the prior weeks. Investors initially sided with the gold as the main safe haven prior to the meeting and the support continues to favor the gold as the safe haven amidst these kinds of times where the dollar prices stumble.
The upbeat news from stronger euro pushes the gold prices today; the spot gold was up by an impressive 0.2% and settling at $1,290.66 an ounce. On the other hand, the gold futures were also up, the deliveries for December managed to climb by a whopping 0.2% today and easing at $1,290 in earlier trading hours.
The ongoing push and pull between the dollar and gold has been going on for years and years; the interest rate hike is excruciating against the gold as the increasing the rates will also push the opportunity cost of holding non-yielding assets which includes the bullion, and then boosting the dollar price in return.
Some events this week to look forward are the highly anticipated Congressional hearing on Federal Reserve Chair nominee Jerome Powell which will be held on Tuesday, last week’s minutes were disappointing, to say the least as they expressed their opinions about the inflation the upcoming economic data.
The next event to look forward to, which will also be held this Tuesday, is the meeting of President Donald Trump with the Senate Republicans, the whole meeting will revolve around the tax reform legislation which is the party is looking to pursue.
Euro Hits New High, Dollar Index
The euro managed to overtake the dollar today mainly because of the strong German data; this boosted the investors’ confidence which gradually decreased due to the ongoing political turmoil. The euro versus the dollar was at an all-new high, reaching the $1.1946. The upbeat German data pursued a great opportunity for the euro despite the ongoing political debacle that is gradually hurting the European Economy.
Today, the dollar index was dipping at a two-month low of 92.675 at 92.801, the greenback’s performance was sluggish since Friday since the incident on last week’s Fed meeting which puts a looming concern on the next interest rate hike.
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