The gold market has had a volatile week, recording record highs before plummeting. On Monday, the price quickly reached a new historic high of 2,450 USD but could only hold there for a short time and then retreated to close at 2,426 USD. On Tuesday morning, gold prices began to decline slightly but still had a retreat and closed at 2,421 USD. This small decrease turned out to be just a prelude to the coming storm.
The catalyst for the sharp sell-off appeared on Wednesday when the Fed released the latest version of the FOMC meeting. The minutes showed that Fed officials expressed concern about recent inflation reports, questioning the effectiveness of monetary policy in bringing inflation to the 2% target in a sustainable way.
On Thursday, gold continued to experience a large decline and after only 3 sessions, the price of gold rose to more than 120 USD from its historical peak of 2,450 USD.
Selling pressure also comes from the strong USD throughout the week. Although the DXY index fell 0.27% to close at 104.76, even this temporary weakness could not buoy the gold market.
However, geopolitical news that emerged over the weekend supported gold prices, at least temporarily halting the decline and possibly even opening up a recovery.
The catalyst for the sharp sell-off appeared on Wednesday when the Fed released the latest version of the FOMC meeting. The minutes showed that Fed officials expressed concern about recent inflation reports, questioning the effectiveness of monetary policy in bringing inflation to the 2% target in a sustainable way.
On Thursday, gold continued to experience a large decline and after only 3 sessions, the price of gold rose to more than 120 USD from its historical peak of 2,450 USD.
Selling pressure also comes from the strong USD throughout the week. Although the DXY index fell 0.27% to close at 104.76, even this temporary weakness could not buoy the gold market.
However, geopolitical news that emerged over the weekend supported gold prices, at least temporarily halting the decline and possibly even opening up a recovery.
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