XAU/USD Falls Below $1,800, as DXY Corrects Before Fed Minutes

Updated:

XAU/USD revisits its in-day low of $1,795 while a stronger USD burdens major assets during the Tokyo session. Additionally, poor sentiment from China combined with the Forex market’s cautious mood before the FOMC gathering.  This gathering further pushed the USD recently.

The USD is recovering near 105.75 as the risk-aversion current supports the haven demand for the USD. Also, strengthening the USD is the Fed’s policymakers’ reluctance to acknowledge the recent milder inflation and economic worries from Europe and China.

Lately, China’s Retail Sales regressed to 2.7% last month, against the 5% anticipated and the 3.1%. At the same time, Industrial Production fell to 3.8% from 3.9% before and 4.6% market prediction. During last week inflation in China reduced for last month (July). Subsequently, this pushed the POBC to reduce the annual Medium Loaning Facility rate by 10bps. The fact that China is the biggest XAU/USD User makes Gold’s price susceptible to news about China.

XAU/USD Falls Below $1,800, as DXY Corrects Before Fed Minutes

More XAU/USD Price Factors

Also, the news United States lawmakers are visiting Taiwan, following what happened after Pelosi visited Taiwan, sparked anxieties of tension between the United States and China. And this is likely to affect the XAU/USD price.

Somewhere else, milder figures of the United States CPI, as well as the PPI, somehow eased market inflation worries. Also, Richmond Fed Bank President Thomas Barkin disclosed on Friday that he intends increasing interest rates to further curb inflation.

The United States ten-year Treasury stays pressured near 2.83 after publishing weekly losses last Friday. Also, the S&P 500 recorded 0.25% in-day losses, and at the same time, Japan’s Nikkei 226 rose by 2.68% in one day.

Going by all this fatalist, XAU/USD traders might want to wait for the Federal Reserve minute for clearer guidance. Nevertheless, today’s New York Empire State Production Index for this month (August), anticipated at 8.5 against 1.1 before, is likely to supply instant directions.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.