Dollar Stays Firm After Bouncing On Position-Squaring. The dollar edged higher against a basket of currencies on Wednesday, after getting a boost the previous day as investors started to reduce their short dollar positions ahead of a global central bankers’ conference later this week and as the euro was weighed down by a weaker-than-expected reading on German investor confidence.
Gold Meets A Tough Resistance Level Of $1300. After trading to above $1300, resulting in gold prices reaching a three-month high, the stronger dollar and resumed market confidence led to a sell-off in precious metals. The gold price fell from a two-month high and is going to form a ‘triple top’ chart pattern if it continues to head south. It seems $1300 an ounce is a tough price point for gold to trade and close above. It is a matter of when, not if, when it comes to the question of whether gold prices will effectively breach the $1300 ceiling and close above it. Obviously, though, that will not occur in today’s trading session. If not for the strong U.S. dollar, gold prices would be unchanged on the day.
Mixed Retail Sales Data Supports The Loonie. The Canadian dollar was marginally weaker against U.S. dollar on Tuesday despite firmer oil prices, as the greenback rallied ahead of the annual Jackson Hole conference. Earlier in the session, the loonie had touched its strongest level in three weeks after robust domestic retail sales data for June bolstered expectations the Bank of Canada could raise interest rates again in October. The strength of the economy this year helped the central bank last month to raise rates for the first time in nearly seven years.
Oil Prices Slip After API Reports. The API reported a major drawdown on U.S. crude oil inventories of 3.595 million barrels – one-third of last week’s API-reported draw of 9.2 million. Also weighing in on oil prices this week so far has been news that OPEC’s November meeting would discuss the fate of the current agreement – whether it would extend the cuts further or decide to terminate it.