The gold price reached the highest level of two weeks on Friday. The bright metal, the first -week rise in five weeks, said that the decline in the US dollar and the treasury yields take a little break from the expectations of more interest rate hikes than Federal Reserve. Analysts interpret the market and share their predictions.
“VIEW IN GOLD Consumption can continue”
Bart Melek, President of TD Securities’ strategy of commodity markets, says that gold will be bound between the levels of $ 1,830-1.850 until a new catalyst, such as employment or consumer prices data next week. Melek adds that with the recovery of China, vitality in gold consumption can continue and people buy yellow metal to protect against inflation.
While the US Dollar Index turned to the first -week loss in five days, it made the gold more attractive for other foreign exchange owners, while the US 10 -year indicator returns went down from the four -month summit. The FED President Christopher Waller said that the rates of strong economic data can see the rates of 5.1-5.4 %, while Atlanta FED President Raphael Bostic said that he was in favor of a ‘slow and stable’ increase and a pause in the middle or end of the summer.
“If the price of gold is broken on this level, there will be a new demand for the ingot”
In a note of Oanda’s senior market analyst Craig Erlam, he writes that the support of gold in the next few weeks can be caused by a more hawk change in US monetary policy.
Ole Hansen, President of the SAXO Bank Commodity Strategy, says that gold has found support at $ 1,800 and will be a new demand if there is a break of more than $ 1,865. According to the analyst, if we see any sign of weakness in economic data and causes interest rate hike expectations to decrease, this will be supportive.
Gold closed the price with a strong rally week
The number of new applications for unemployment salary in the US fell again last week, which increased fears that the Fed would continue to increase its interest rates longer. Another report published on Thursday showed that labor costs increased much faster than previously predicted in the fourth quarter.
According to Tastylive Global Macro President Ilya Spivak, a number of different FedSpeak and service ISM was determined during the week. Spivak, Fedspeak interest rates can rise further, if the reinforcement, gold can close the week in a troubled way, he said. However, the price of gold closed the week at an increase of 1.11 %for $ 1,856.
In which direction, how will the gold price move?
Kitco analyst Gary Wagner, investors evaluating the interest path of the Fed, the dollar’s gold price movement ‘primary driving force’ writes. The dollar rose in February and pushed the bottom down, as the hot employment and inflation data in the United States have priced traders’ expectations of more aggressive FED interest rate increases and priced their previous interest rate reduction expectations until the end of the year.
RBC Capital Analyst Christopher Luney says that gold prices may have recently found support with their fears that an aggressive FED could lead the US economy to recession. However, the increase in the US Treasury bond returns and that a relatively resistant dollar means that the upward movement may be limited.
Oanda’s Senior Market Analyst Edward Moya said, “If the FED President Powell Şahin remains loyal to the script and does not see a great downward revision for the month of January and a strong increase in February, Gold can see that this week’s rally has gone away. Powell may jump if the summit is close to the settlement, ısıyı
“The dollar can weaken in the second half of 2023”
According to Anz Bank strategists, it is likely that gold is likely to follow the changing market expectations around the Fed tightening in the short term. In this context, strategists make the following assessment:
The Gold Market continues to be fragile against the Fed’s monetary policy market expectations. Strong economic data from adhesive inflation USA increases the risk of further interest rate hikes. This is likely to have an inverse wind in the short term. Nevertheless, we foresee a limited increase in the USD, a rear wind for gold price. Even with higher final rates, the USD is likely to weaken in the second half of 2023.
“Correction in the price of gold is more or less completed!”
Kriptokoin.comAs you followed, the price of gold lost more than 5 %in February. However, Commerzbank strategists think that the yellow metal hit the bottom. According to strategists, the latest movements of gold was a combination of sharp rising bond returns due to the enormous upward correction of US dollars and US interest rate expectations. Strategists make the following statement:
At the end of the month, the expected interest summit withdrew to autumn. Moreover, it is now set to almost 5.5 %, and this is about 70 basis points higher than foreseen at the beginning of the month. Moreover, there is no expectation of interest rate reduction this year. Despite the expectations of an even higher interest rate, the price increase this week may indicate that the correction of the gold price has been completed more or less and the price may have hit the bottom at the beginning of the week.