On Thursday, gold fell amid USD dollar strengthening and new duties of Beijing and Washington.
Yesterday gold lost about 0.8% in price after good corrective growth, which was observed earlier this week. The turning point for the precious metal was the publication of FOMC «minutes» which confirmed the preservation of the regulator's plans to continue the process of gradual change in interest rates. The next rate-hike is possible at the next meeting, scheduled for September 26. After the release of this information, the dollar began to gain again, increasing pressure on precious metals. At the end of the day, the dollar index strengthened by 0.6%.
Another factor of pressure on gold is the situation around the confrontation between Beijing and Washington. This summer, gold has lost the status of a defensive asset, losing this status to USD dollar, which is now the main beneficiary of the escalation of the conflict. Yesterday, the United States imposed new duties on Chinese goods worth $ 16 billion, which China responded by filing a lawsuit in the WTO. In parallel, investors were waiting for the completion of the next round of negotiations between the parties, which did not bring any results. Both sides remained at their starting positions, which indicates continuation of the conflict.
As a result, we note some easing of pressure for USD dollar, which allowed the yellow metal to recover from the new annual lows, for the gold the situation starts to deteriorate again, and so far the market has significant factors that could help the precious metal in confronting the dollar.
Today we are waiting for Jerome Powell's speech at the symposium in Jackson Hole. Investors want to hear the FRS chief opinion on the growth of volatility in the market of developing countries, the growing opposition of the US and China and the possible impact of all these factors on the US economy and the Fed policy.
On the criticism voiced by the head of the White House earlier, a very clear comment was given by one of the representatives of the Federal Reserve Kaplan. This high ranking official in particular stated that the officials of the Federal Reserve would completely ignore political pressure, thereby making it clear that all of Trump's statements will have no influence on the policy of the regulator, which is another factor of support for the US currency.