Gold (XAU/USD) is declining for the second day in a row. The reason of such a dynamic is that investors have turned to stocks.
Gold heads south In Asia as traders become cautious ahead of Fed views
On Tuesday, gold went down in Asia as markets became cautious ahead of Wednesday's Fed policy statements with the highly anticipated details on the tempo of unwinding its balance sheet.
December delivery gold futures rallied 0.14% being worth $1,312.70 a troy ounce.
Overnight, the leading precious commodity sagged because tumbling tensions on the Korean Peninsula pressured safe-haven demand and a steep uptick in the greenback curbed market sentiment on gold ahead of the Fed’s two-day gathering slated for Tuesday.
Treasury yields headed north abruptly, pushing the evergreen buck up, amid hopes that the key US financial institution will announce it’s about to start unwinding its $4.5tn bond portfolio and it’s planning to have its outlook reaffirmed that an extra rate lift remains appropriate in 2017.
Meanwhile, geopolitical uncertainty relieved, thus reducing demand for gold because market participants simply downplayed US-North Korea tensions and shifted to risker assets, including equities.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.