Gold Price Benefits From Weaker US Dollar

Gold price is holding on the $1701 per ounce level during the first US trading session in October. Gold seems to be currently defending its gains amid a broadly weaker US dollar. However, some economists believe that it stays immersed in a strong downtrend despite the recent respite afforded by the USD’s latest decline.

Gold has confidently departed the $1622.15 low recorded on September 26, this is true, but the risk of surrendering still exists into October, given that strong economic data continues to point to a more aggressive Fed rate path ahead during next financial policy meetings.

The increase in inflation’s persistence impacts the whole picture across financial markets. The current situation is expected to last longer than historical precedents with the Fed likely to keep rates elevated for longer, even if recession is brought about, which argues for a prolonged period of pronounced weakness in precious metals, particularly gold.