Gold is trying to flex muscle, despite the strength of the greenback. European stock markets in red and tension over Brexit (with the pound collapsing further) are pushing some investors to bet on gold. But the main trigger still appears related to expectations of a dovish Fed in this week’s meeting.
From a technical point of view, both silver and gold could be ready for further rallies in case of a dovish FOMC. A 0.25 basis points cut seems already priced in, so investors are now looking for a stronger signal such as a 0.50% cut, which appears not likely at this stage, or a 0.25% cut, with some reassurance about further rate cuts later this year, in order to support US economy.
