Spot prices for Gold (XAUUSD) jumped like a scalded cat from a nearly $1900 low of September last Thursday to around $1930 per troy ounce. Meanwhile, December futures for the yellow metal already exceeded a $1950 landmark. This happens due to a confusing uncertainty around the interest rate difference between the U.S. Dollar nominated and the Euro nominated fixed-income bonds. Traders are not sure which side to choose in the EUR/USD battle, and they often prefer buying Gold.

EUR/USD dropped to its multi-month lows at 1.0630 but recovered to above 1.0685 after last week's comments of the European Central Bank's (ECB) Christine Lagarde, who provided the latest rate hike with a telling comment that the ECB "have made sufficient contributions under current assessment to returning inflation to target in a timely manner". Of course, she didn't absolutely rule out scenarios of further hikes "if needed", because "we can't say that now - that we are at peak". Yet, Mrs Lagarde reiterated that the focus "is going to move, going forwards, to the duration". She added that there was "a solid majority of governors to agree with the decision we have made", even though "some ECB board members did not even want to raise rates on Thursday".

All taken together was at least a strong hint on the possible finish of the ECB's rate raising - if not in this cycle, then for 2023 and some further months, at least. The ECB had to downgrade its own GDP forecasts to 0.7% saying that "the recovery we had planned for the second half of 2023 has been pushed out over time", which is on the verge of an acknowledgement that regional recession may wait around the corner.

The U.S. Federal Reserve (Fed) is unlikely to raise its rates again on September 20, yet investors are still guessing what further projections on the interest rate path for 2023 and 2024 the Fed may offer them on the same Wednesday night. The Bank of England will finish its meeting next morning after the Fed, which makes the currency puzzle even more complicated. Investing in Gold, including short-lived speculative trades on XAUUSD, may be a good solution to avoid cutting that Gordian knot for the moment. So, testing the next resistance levels like $1950, $1980 or even $2000 seems to be much more likely than dipping below $1900 where just stop loss orders could be properly placed.