In the start of 2022, the dollar index hit a low of roughly 99 points. Following those lows, the dollar began an upward trend that culminated in a recent record high slightly above 114 points on September 28, 2022. The dollar index had been trading lower from highs of 114 points for 10 months when …
In the start of 2022, the dollar index hit a low of roughly 99 points. Following those lows, the dollar began an upward trend that culminated in a recent record high slightly above 114 points on September 28, 2022. The dollar index had been trading lower from highs of 114 points for 10 months when it struck an intraday low of 99.14 on July 18, 2023. This signaled the end of the correction and the start of a rise that has lasted to this day.
Since mid-July, the dollar index has been steadily rising to higher levels. The dollar is up 0.24% as of 5:15 PM EDT, while the index is steady at 104.699. Because gold is matched against the dollar, precious metals often move in the opposite direction of the dollar.
During trading sessions yesterday, market players were buying up gold prices, if the dollar index was also trading higher, gold would have to overcome dollar strength first. After today’s $0.60, or 0.03%, decrease, gold futures are currently set at $1943.70. Simple algebra shows that if the dollar gained 0.24% and gold fell by 0.03%, gold would have risen 0.21% if the currency had been neutral.
Today’s spot gold price is $1918.30, up $2.50 from yesterday. However, according to the Kitco Gold Index (KGX), spot gold gained $6.10 owing to routine trade but lost $3.60. When the effects of dollar strength were added together, the outcome was fractional gains of $2.50 per ounce.
Given the strength of the dollar, gold fared rather well. Although gold traded to a lower high today, it also traded to a little higher low. Furthermore, the genuine body on a candlestick chart (the price relationship between the candle’s open and closing price) was minimal, resulting in a candle known as a spinning top. This candlestick pattern is commonly seen during market sessions when there is no new fundamental news or technical price levels.
Risk disclaimer:
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.
