With the US Dollar (DX Futures) falling to its lowest price since June 14th, Gold Futures (GC) are showing renewed strength. Gold prices began an upward move on Monday morning putting the futures instrument back in the running to test its highest price levels in nearly two weeks.
Gold finished the first week in July with meager gains following Friday’s positive jobs report. However, although more US jobs were created in June than expected, a notable increase in wages has been interpreted as a catalyst to increased inflation. With potential Federal Reserve rate hikes looming, a weaker dollar makes gold an attractive safe haven to traders.
An additional factor in the DX vs. GC equation is concern over a trade war. Global markets seem to have relaxed their sentiment regarding international trade relationships which have been strengthening the US dollar. Furthermore, as China’s demand for precious metals declines, positive sentiment on gold and other precious metals has seen a decrease in the past few months.
The charts above demonstrate the recent market interplay with gold futures on the left and US Dollar futures on the right. These charts were created using NInjaTrader which includes the MACD, Volume up down, and EMA indicators – along with 100+ additional indicators – for FREE!
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