2016-07-25 14:56:47

Last week the price of gold fell to three-week lows, as investors’ concerns about slowdown of the global economic growth have decreased, while investors’ risk appetite has increased.

The decline in gold prices is also associated with the take profit in the long positions on gold after the Brexit.

However, the affect of Brexit on the world financial markets was not very strong and the number of long positions on gold was excessive.

US macro-economic statistics is positive, which gives ground that the US Fed will increase interest rate before the end of this year (probably, in September). On Wednesday (20:00 GMT+2) interest rate decision by the US Fed will become known. It is likely that the rate will be left unchanged. Investors’ attention will be focused on the Fed’s comments on this issue. Any indications of the possible increase in the interest rate will cause the rise in the USD and will have a negative impact on the price of gold.

High interest rates put pressure on the price of gold, as gold does not bring interest income. Demand for gold decreases with the rise in the borrowing costs for its acquisition and storage.

With the opening of today’s trading session financial market is lanquid, in anticipation of important news scheduled for this week. However, it is likely that the USD will continue to strengthen, while the price of gold will remain under pressure.

Strong position of the USD in the market and increasing expectations of the rise in the interest rate in the USA will add pressure on the gold prices.

XAU/USD: The rise in the USD continues. Fundamental analysis for 25.07.2016.