Logo of Phnom Penh Post newspaper Phnom Penh Post - US Federal Reserve policy decision to influence gold prices

US Federal Reserve policy decision to influence gold prices

Content image - Phnom Penh Post
Analysis by Golden FX Link Capital business manager Long Samnang.

US Federal Reserve policy decision to influence gold prices

Gold price has been on a downward trend since last Thursday – falling from a high of $1,822.77 per ounce to an opening price of $1,818.21 on Tuesday.

Investing.com. reported that the market of the yellow metal continued to be under pressure as the dollar strengthened and US Treasury yields rose.

In Asian markets, gold futures on Tuesday fell by 0.07 per cent, setting to around $1,815.

“Investors now await the US Federal Reserve’s policy decision due to be handed down on January 26. The central bank has already indicated that it could hike interest rates in March 2022 to curb high inflation.

“In Asia Pacific, the Bank of Japan kept its interest rate unchanged at – 0.10 per cent as it handed down its policy decision earlier in the day.

“Elsewhere in the region, the People’s Bank of China (PBOC) triggered expectations of further monetary easing after it lowered the rate on its one-year policy loans by 10 basis points to 2.85 per cent on Monday. It also cut the rate on the seven-day reverse repurchase agreements to 2.1 per cent from 2.2 per cent.

“The PBOC moves are a marked contrast with the series of interest-rate hikes widely expected from the Fed within 2022,” reported Investing.com.

The price of gold in early January moved between $1,831.61 and $1,782.46, while last week’s price was between $1,828 and $1,790 – indicating that the odds of gold are running in sideways direction.

The market might be in favour that the new direction of gold seems to be waiting for the Fed to decide whether to raise, lower or keep interest rates for the US currency.

Golden FX Link Capital business manager Long Samnang said: “Gold prices are likely to fall before the central bank’s decision and continue to rise after the decision as the next US interest rates change could only help in the short term, meaning that it is not yet possible to completely reduce the rising inflation rate.”

Therefore, for this week’s trading recommendation, investors can consider selling gold before the US Federal Reserve’s decision of $1,815, setting a take-profit function at $1,800 and a stop-loss at $1,828. For an uptrend, investors can wait to buy after the central bank’s decision.

Content image - Phnom Penh Post

MOST VIEWED

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180

  • CCC team off on US business trip

    The Kingdom’s leading economists and private sector representatives have called on the US to renew its tax preferential status for Cambodian exports, as a Cambodia Chamber of Commerce (CCC) delegation departed for a weeklong business visit to the US, where they will meet with

  • PM takes time to meet, greet Cambodians living in the US

    After landing in the US ahead of the ASEAN-US Special Summit, Prime Minister Hun Sen was received by over 1,000 Cambodian-Americans including political analysts who welcomed him with greetings, fist bumps and selfies. Hun Sen also met with analyst Mak Hoeun, who had allegedly spoken ill

  • Khmer cinema classics back on big screen for free at WB Arena’s outdoor movies series

    On a recent Saturday evening at WB Arena, Bunsong was enjoying a tasty BBQ meal with his family after work on the long tables that had been arranged out in front of the restaurant as they watched a Khmer action movie on a big outdoor

  • PM heads to Washington for ASEAN-US special summit

    Regional and international issues and how to bring the ASEAN-US partnership to another level will be discussed at length as Prime Minister Hun Sen and his ministers arrive in Washington, DC, for a special summit on May 12-13. During the trip, Hun Sen and ASEAN

  • National Assembly refutes EU resolution

    The National Assembly (NA) has hit back at a European Parliament resolution condemning the political and human rights situation in Cambodia, calling it another display of the Parliament’s “double standards”. Key points of the resolution include a warning that the Parliament could exclude the