Correlation between gold and Euro | 26 Oktober 2021

26 Oktober 2021, EUR/USD

Correlation between gold and Euro

EURUSD trading plan:

The bullish rally in the gold market is positive for the European currency, as assets correlate with each other. Gold prices rose, as a retreat in U.S. bond yields and persisting worries about inflation lifted the safe-haven asset ahead of major central bank meetings this week. Gold is often considered an inflation hedge, reduced stimulus and interest rate hikes push government bond yields up, raising the opportunity cost of holding bullion. Powell’s recent comments may have amplified concerns of inflation sticking around for longer, which is apparently further eroding support for team ‘transitory’ and fuelling a stronger bid for gold as an inflation hedge.

Investment idea: buy 1.1585 and take profit 1.1650.

David Johnson
Analyst of «FreshForex» company
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