Gold has been on a decent run since last Wednesday, spurred on by the profit taking we’ve seen in the US dollar after the Federal Reserve raised interest rates while maintaining its outlook for the next couple of years. This move was viewed by traders as a dovish hike which was fully priced in and therefore triggered the correction in USD.
While the correlation between USD and Gold did weaken throughout February, it would appear the perceived reduction of the political risk environment has strengthened the relationship once again. The question now is whether the small resurgence we saw in USD this morning can be sustained and take the edge of Gold’s run since the Fed meeting.
Senior Market Analyst Craig Erlam discusses all of this and gives his analysis on the daily, 4-hour, 1-hour and 15 minute charts.