Gold futures have been trading higher on Tuesday as investors continue to gauge the movement in the U.S. Dollar, something that has been heavily influenced today by forecasts of a weaker global economy. With the market hovering near a three-week low.
Investors are currently trying to choose an asset to work as a safe-haven, be it U.S. Dollar or gold.
The falling U.S. Treasury yields and lower demand for higher-yielding assets are currently helping to underpin gold.
When it came to traders, they haven’t had many economic data to assets lately due to the partial government shutdown, now the USD - GOLD relationship is coming back to action.
In addition to this, investors know the Fed’s stance on policy, helping them to determine risk appetite with the performance stock market.
Currently, gold should be supported by reports of weaker Chinese economic data, with the International Monetary Fund’s cut in global growth forecasts, and traders have shown almost no reaction.
The Fed’s dovish outlook and slower global economic growth had been driving gold prices higher. Although, as time goes by, things have changed, and gold traders were now focusing on Treasury yields and the movement in the U.S. Dollar. Now, the market should expect to see these two factors exert the most significant influence on gold prices later on Tuesday.
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