With the Federal Reserve seemingly winding down its cycle of interest rate increases, a stronger dollar is no longer the big currency market story. Gold is. Gold is back. And for at least the next 3 to 6 months.
Treasury Secretary Steve Mnuchin gave the markets a green light to push the U.S. dollar lower in remarks at Davos. Currency traders, already on board the lower-dollar train, didn’t waste time before pushing the throttle. The Dollar Spot Index (DXY) is down 0.86% as of noon New York time to 89.347. Traders have been eyeing the 90 level on the index to see whether support would hold at this level or if the index would break below 90 and set up a move lower.
Gold held by ETFs that invest in the yellow metal rose to 2,250 metric tons on January 22, according to Bloomberg. That’s the highest level of gold held by ETFs since May 2013. After turning in its best year since 2010 in 2017, gold has continued to climb in 2018
