Gold Is Rising Supported by the Decline of the Dollar

market news summary

European indices closed higher at the end of Monday’s trading, supported by sectors exposed to China due to Beijing’s measures to bolster the rising stock market. The STOXX 600 European index ended the session with a 0.9% increase, marking its best one-day performance in a month. Technology stocks led the gains with a 1.7% rise, following the early gains of major stocks on Wall Street.

As part of efforts to encourage foreign business activities in China, the Chinese Ministry of Finance announced on Monday that it would extend preferential income tax policies for foreign workers in the country until the end of 2027.

Dollar Index (USDX)

The dollar declined against its competitors, causing the dollar index to trade below its pivot point at $103.80 today. The focus this week will be on the upcoming report of the US Personal Consumption Expenditures (PCE) Price Index, scheduled for release on Thursday, and the Non-Farm Payrolls data for the month of August, set to be released on Friday. These releases are expected to provide more clarity about the strength of the economy.

The market believes that if the Gross Domestic Product (GDP) data this week turns out to be negative, it could dampen the Federal Reserve’s willingness to further increase interest rates.

Pivot point: 104.00

Resistance level	Support level
104.07	103.85
104.25	103.70
104.45	103.50

Spot Gold (XAUUSD)

Gold prices rose on Monday, supported by the decline in the dollar and bond yields, while investors are anticipating a series of US economic data this week for further clues on interest rate expectations.

The spot price of gold increased by 0.3% to $1919.41 per ounce, and the settlement of US gold futures rose by 0.4% to $1946.80.

Pivot point: 1919

Resistance level	Support level
1926	1913
1932	1906
1939	1899

Dow Jones Index (DJ30ft – US30)

US indices closed with collective gains in Monday’s session, marking their second consecutive daily gains as investors absorbed Jerome Powell’s statements from last Friday, suggesting that the Federal Reserve might need to raise interest rates further to contain inflation.

The Dow Jones index rose by 0.62%, equivalent to around 217 points. The NASDAQ and S&P 500 indices also increased by approximately 0.8% and 0.6% respectively. These gains were supported by the rise of NVidia and Meta shares by 1.8% and 1.7% respectively.

Pivot point: 34565

Resistance level	Support level
34735	34445
34855	34275
35025	34155

US Crude (USOUSD)

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