Gold prices climbed to their highest in more than a week on Tuesday as a weaker dollar and a drop in U.S. bond yields boosted demand for the metal, as per a Reuters report.
This is of a huge amount of interest for all kinds of investors as the dollar's movement has implications for all asset classes.
Emerging markets want a weak dollar. The dollar rallied and a lot of big global banks who put out dollar forecast over the last 2-3 days have flipped those forecasts from dollar weakness to dollar is heading higher.
Therefore, in a flux kind of a situation where we are in, the dollar has now started to look like it’s headed down again.
What has happened?
There are two things which have happened. One, the dollar last week completed an evening star pattern formation at the trend high. Second, we also had a situation where the dollar index failed to sustain gains above major 76.4 percent Fibonacci retracement which stood at about 93.44 – and both these things signalled weakness.
Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details through graphs and charts.