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Correlation between the British currency and gold

Correlation between the British currency and gold | 28 January 2022

28 January 2022, GBP/USD

Correlation between the British currency and gold

GBPUSD trading plan:

Gold prices extended losses to a more than one-week low and Treasury yields rallied after U.S. Federal Reserve Chairman Jerome Powell signaled an interest rate increase in March. Powell struck a hawkish tone on Wednesday, flagging a rate increase in March. That sent U.S. Benchmark 10-year yields close to one-week highs while the dollar rose to its strongest in more than a month. Higher yields and interest rates dent the appeal of bullion by raising the opportunity cost of holding non-yielding gold. This is a negative signal for the European currency, since assets correlate with each other.

Investment idea: sell 1.3424 and take profit 1.3377.

David Johnson
Analyst of «FreshForex» company
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