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 are actually fluctuating downward. Honestly, is your head big enough to understand this? This situation is beyond many people’s comprehension and far removed from the “geopolitical factors stimulate” category. Compared to the gold trends of 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 instead.

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 entangled in the Middle East, 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 also 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 rate decision announced early tomorrow, will the dollar index make a dramatic comeback? This is something we need to watch closely. After all, a stronger dollar is the main demand at the moment. Everyone must remember this point. In trading, try to buy on dips and enter at effective support levels. This is today’s trading strategy for your reference!