With the pullback in the dollar, the safe-haven appeal of gold seems to have returned to markets, as market participants are now looking for ways to hedge their bets against a possible recession scenario towards the end of this year. At the time of writing, the yellow metal is trading at $1,649.3, slightly lower compared to the September 28 session.
Almighty dollar
In his daily commentary on gold, Jim Wyckoff, senior analyst at Kitco.com, said that investors are keeping an eye on the currency markets. Meanwhile, the ICE US Dollar Index (USDX), an index that compares the strength of the dollar against a basket of other currencies, dropped by 0.3%; yet, it is still holding to gains seen over the week, this month, and the entire quarter.
Gold appeal
With major economies scrambling to stem and reverse the erratic market action, gold might become the safe haven of old, giving an alternative investment to risk assets, which have been down for most of 2022. However, the US dollar has taken over as a haven play in 2022, mostly due to the strength of its economy, compared to emerging markets. A further rise in the US dollar could sidetrack gold’s potential rise, but other macro factors could play a major role. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
