Daily US Dollar Index (DXY)
The U.S. Dollar Index (DXY) slipped 0.25% to 97.606, hitting its lowest since late July. A weaker dollar makes gold cheaper for foreign buyers, increasing demand. The greenback has been weighed down by softening U.S. economic data and growing concerns over Fed independence, as political tensions rise over President Trump’s attempts to influence monetary policy.
Investors are watching Friday’s nonfarm payrolls report closely. August job gains are expected at 78,000, up slightly from July’s 73,000. Softer labor data could solidify the case for Fed easing, reinforcing the bullish momentum in gold.
Is Gold Overbought in the Short Term?
Despite the strong rally, gold is now up $178.29 over the past eight sessions and has closed higher five days in a row. The metal is trading $138.15 above its 50-day moving average, and while this isn’t extreme, it’s worth noting that at the previous peak in April, the spread was $543.64. Traders may want to consider whether to chase the rally or wait for a pullback to re-enter.
Gold Prices Forecast: Bullish Above $3,500 With Eyes on $3,879.64 by September 23
Momentum remains firmly bullish, underpinned by dovish Fed expectations, a softening dollar, and geopolitical uncertainty.