Gold Defies Dollar Strength Amidst Fed Rate Hike Expectations
Despite a strong US dollar and higher policy rates, gold has maintained its long-term bullish structure. Gold futures contracts (GCZ6) depreciated by 0.93% to $4,383 per ounce amidst a heightened likelihood that the Federal Reserve will reinforce its restrictive monetary policy stance. The CME FedWatch Tool indicates a 55% chance of a 25 basis point interest rate hike in October.
The US Dollar Index (DXY) has appreciated by 1.70% over the past fortnight, typically exerting downward pressure on bullion. However, gold retains its bullish technical structure, defined by higher highs and higher lows, with a year-on-year appreciation of 17.73%. This trend highlights gold's underlying strength as a safe-haven asset.
From a technical perspective, gold futures continue to follow a robust long-term bullish trajectory. A detailed analysis reveals that prices remain above both the 50-day and 100-day Simple Moving Averages (SMAs), reinforcing the prevailing upward bias.