Remarks made by Federal Reserve chair Janet Yellen and vice chair Stanley Fischer have reignited speculation that interest rates will be raised soon, sending gold prices to a five-week low.
Yellen said in the Jackson Hole meeting last week that an improvement in the economy and the labor market in recent months had boosted the case for hiking rates.
On Monday the price of the yellow metal rebounded to US$1,325 an ounce, ending its slide in six straight sessions.
Still, technical charts show that gold prices may retreat further to US$1,308 or even US$1,287. Meanwhile, US$1,354 is seen as a key resistance.
While Fed may soon tighten its monetary policy, the Bank of Japan is likely to further expand its stimulus in a meeting next month amid slackening household spending. Such divergence may weigh on the Japanese yen.
After hovering near 100 against yen, the dollar rose to 102.4 on Monday, breaking a technical downtrend. The greenback may gain further to test a 100-day moving average of 105.6.
The Aussie dollar bounced back to 0.7836 in April after peaking in January. The first resistance was at 0.785, followed by 0.80 and 0.8165.
On the support levels, 0.745 is the first level to watch and then 0.738.
This article appeared in the Hong Kong Economic Journal on Aug. 31
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]