Gold Holds Gloomy Outlook amid Price Crash

WikiFX News (22 Sept.) - On Monday, gold prices continued retreating in Asian markets while trimming early losses below $1,900 to $1,882 in U.S. markets. The yellow metal may be hampered by the massive selling for its price is recently more sensitive to bad news than good news.

The University of Michigan said its U.S. consumer sentiment index in September rose to 78.9, the best level since March. The data indicates that consumers hold positive expectations about the country's economic prospects.

Kaplan, president of the Dallas Fed, predicted the U.S. will see an economic recovery next year and the unemployment will likely approach 3.5% by 2023. These hawkish words catalyzed the DXY up above $93.50.

Pressed by the strengthening greenback, the intraday price of gold kept declining after a rally to $1,955. Moreover, the Trump administration has softened its stance on Tiktok, which also weakened the markets' safe-haven demand for gold.

The Fed Chair Powell will testify before Congress this Wednesday and Thursday. He is generally considered to reiterate the views that economic prospects will rally and fiscal policy is of vital importance, which could further strengthen the U.S. dollar and send gold prices lower.

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Chart: Consumer Sentiment Index