​Surging USD on Tumbling Gold: Rapid Market Reaction to FED Decision

WikiFX News (20 Aug) -The Fed released its July meeting minutes in the early hours of this morning, which unexpectedly sparked volatility in markets. Consequently, the DXY enjoyed an aggressive growth with gold losing as much as $80.

After the release of the unremarkable meeting minutes, the shrinking Wall Street equity indices witnessed gold giving up the $2,000 barrier and retreating below $1,930, whilst the DXY and Treasury yields both reclaimed some lost ground.

The medium-term setback of gold is expected to echo into future tradings, sending gold prices into the correction zone of $1,900-2,000.

Being more pessimistic on the economics than most others, the Fed committee members made another assumption: the U.S. government will be more likely to propose a new stimulus package if real GDP and inflation dwindle amid the economic activities largely destroyed by the accelerated diffusion of COVID-19 outbreaks.

Investors are advised to focus on changes in trade tensions. Once the disputes are escalated, the risk aversion might fuel a rise in DXY.

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