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Gold Starts with Big Drop from the Weekend – Strong USDX Causes Pressure

The gold price has come out of the weekend with a fat minus and falls at the beginning of the week for a short time even over 2%. A strong USDX puts pressure on the gold price ahead of the FOMC meeting, from which analysts assume that interest rates will be raised by 0.5% to 1% this week.

Gold is down 1.77%, or $33.60, to $1,864.30 per ounce in Asia tonight.

The price of silver falls 1.12% to $22.59 per ounce.

Platinum price falls 0.64% to $942 per ounce.

Palladium price falls 5.24% to $2,286 per ounce.

The USDX continues to gain today, rising 0.45% to 103.430 and remains above the 100 mark. Thus, the USDX rises as high as last 2002. The markets expect this week the Fed’s interest rate decision, which will meet on Tuesday and Wednesday. Previously, Fed Chairman Jerome Powell has already announced a rate hike from 0.5% to 1.0%. With this, the Fed wants to bring back the rapidly rising U.S. inflation. Powell recently stated that the Fed will fight inflation more aggressively and that price stability is the Fed’s top goal. Still, the Fed wants to keep a close eye on the economy, as a recession is to be avoided at all costs. A strong USDX and higher interest rates put pressure on gold prices in the short term, as gold becomes more expensive for holders of other currencies and gold is an asset that does not yield interest gains.

With the gold price, the oil price has also fallen sharply today. WTI crude oil fell by almost 3% in the evening in Asia.

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