Dollar Decline Puts Pressure on USD/JPY Rally
The US dollar's decline has allowed USD/JPY bears to push prices away from the key round 160, reducing the risk of further currency interventions by the US and Japan.
Disappointing US retail sales figures have also helped gold climb back above $4,400 per ounce. The precious metal is poised to continue its rally in either a recession or stagflation scenario, as there's little difference between the two for gold.
The likelihood of a Fed rate hike in 2026 continues to fall, with Goldman Sachs believing that consumer price inflation will continue to fall without any intervention from the Fed. The bank estimates that the probability of a federal funds rate hike in September is highly unlikely against a backdrop of slowing inflation, falling employment and declining retail sales.