Zong Xiaolichao: The Fed Rate Decision Is Coming – What Changes Will It Bring to the Market?

Has anyone noticed? Gold has been stuck in consolidation for two consecutive trading days. This is quite puzzling because there is intense conflict happening in the Middle East right now, yet it has no apparent impact on gold. Gold prices not only failed to rise but actually fluctuated downward. Honestly, is your brain big enough? This situation is beyond many people’s understanding and has far exceeded the scope of “geopolitical factors stimulation.” Compared to the gold trends in previous years, it’s completely different and doesn’t follow the same logic. So many people are confused and say they can’t understand why, despite the heated situation in the Middle East, gold isn’t rising but falling.

Actually, it’s not that gold wants to fall, but a large outflow of US dollar liquidity is causing gold to decline. The US is deeply involved in the Middle East conflict, leading to significant capital withdrawals. Previously, a lot of money was invested in the gold market, which now needs to be sold off first to exchange for other currencies. As a result, gold faces increasing pressure, and prices are fluctuating downward.

Let’s talk about the US dollar index. After a correction over the past two days, the market has indeed reached a critical point. Currently, dollar liquidity outflow is severe. If the dollar continues to weaken, it will only make things worse. Moreover, the dollar index urgently needs to stabilize. As today’s prices gradually pause and with the Federal Reserve’s interest rate decision announced early tomorrow, will the dollar index make a dramatic rebound? This is something we need to watch closely. After all, a stronger dollar is the main demand right now. Everyone must remember this point. In trading, try to buy on dips and enter at effective support levels. That’s today’s trading strategy for your reference!