USD Index and Gold Trend

The USD Dollar Index has reached 109, the dollar was at yearly and multi-year highs against many currencies such as Euro, Yen ….. because the Fed would raise interest rate by 0.75 in May, June, and 1.0 in July to keep US inflation down.

US Dollar Index in July 2022

The aggressive US interest policy has caused gold to drop from 1812-1814 to 1681-1685. But, the Fed officials has confirmed that they will not raise US interest rate by 1.0 and the ECB surprise rate hike by 0.5 in July 22 has made gold to end its drop around 1683-1685.

Gold Sold Off from 1812 to 1681 in July 2022

Identifying a correction gold trend is a key to successful gold trading, The US Dollar Index is the key indicator for gold direction, it is up or down following the Fed monetary policy which requires gold traders to watch the FOMC Meeting minutes and Fed interest rate decision on Wednesday July 27, 2022.

A hawkish FOMC Meeting Minutes next week will cause gold to resume its down trend and it will drop to test 1683-1685. From July 22 to July 26, gold is making a correction and it may go to 1745-1751 or further to 1775-1786 if the US Dollar is sold off heavily before the Wednesday July 27 FOMC Meeting.

Use this tool to view gold buy or sell trend vs USD Index