Gold Prices Flat Amid Strong US Dollar

Gold prices are flat on the day, having earlier in the session touched a five-month low. The precious metal has been suffering the pressures caused by a strong US dollar, as inflation remains sticky and the economy demonstrates a resilience that few had predicted. Against this background, US interest rates could remain elevated for a prolonged period. This scenario would create scope for the continuation of the dominance of the US dollar in global markets, with gold prices likely to suffer further losses. This is one of the reasons traders will be paying close attention to what happens at the Jackson Hole symposium later this week, bringing together economic policymakers worldwide. This event may help clarify the likely path for the leading central banks' monetary policy, providing more direction to the foreign exchange market and helping to define gold's price action in the short-to-medium term.

Ricardo Evangelista – Senior Analyst, ActivTrades