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The U.S. Dollar Weakens Further, Commodities Lead Gains

Summary

On Tuesday (August 24), the U.S. dollar fell against most G-10 currencies. Commodity currencies outperformed other currencies. Investors are waiting for the Jackson Hole meeting to be held later this week to find clues about the Fed’s policy path. -10 currencies rose the most, followed by the New Zealand dollar. Gold prices are consolidating above US$1,800, and some investors are betting that the recent surge in new cases may obstruct the US Federal Reserve’s plan to reduce economic support at the Jackson Hole seminar. Oil prices have risen continuously, and oil distribution once soared 3.66%, reaching a new high since August 13 to $71.27 per barrel, due to strong demand prospects and a fire on a Mexican oil platform.

Commodity closing, COMEX December gold futures closed up 0.1%, at US$1808.50 per ounce. WTI October crude oil futures closed up 1.90 US dollars, or 2.89%, to 67.54 US dollars per barrel; Brent October crude oil futures closed up 2.30 US dollars, or 3.34%, to 71.05 US dollars per barrel.


Spot gold fell slightly on Tuesday, closing at US$1820.90 per ounce. It once touched US$1809.63 during the session, the highest since August 5. Investors are waiting for the annual Jackson Hole seminar to be held later this week to learn more about when the Fed will begin to reduce bond purchases. The market expects that in the speech of Fed Chairman Powell, he is expected to remain vague on the timing of the code reduction, but the possibility of his unexpected announcement cannot be completely ruled out.


The bet that the Fed may maintain its easing policy for a longer period of time helped the price of gold break through $1,800 per ounce this week.Gold prices have been facing headwinds this year. Due to strong US economic data, inflation-adjusted US Treasury yields have also risen moderately, putting pressure on non-interest-bearing precious metals. Tom Price, head of commodity strategy at Liberum Capital, wrote in the report that although the US real yield is now recovering due to strong economic activity, it is still at a low or even negative level. Before the real yield continues to rise, maintain gold exposure. The opportunity cost is still very low.


Oil prices continued to rise, with U.S. oil rising by 3%, setting a new high of nearly a week to US$67.80 per barrel; Brent crude oil futures exceeded US$71 per barrel; China quickly returned new cases of new crowns to zero, and road traffic resumed busy scenes . At the same time, a fire on an oil platform in Mexico has reduced the country’s daily output by more than 400,000 barrels, which is roughly equivalent to the scale of recovery that OPEC+ will discuss next month. Edward Moya, senior market analyst at Oanda, said the news shows that some countries are much better at responding to the delta strain, and the oil price rebound will only continue.


Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.


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