The gold market saw another lackluster performance this week as the price hit the wall at $1,900. While the US dollar continued to trade close to a 20-year high, benefiting from the Federal Reserve’s aggressive rate hike plans, this put selling pressure on the gold price.
“Gold has nothing to fear from rising interest rates”
Despite gold’s disappointing performance, many analysts believe the market is still reasonably healthy and consolidated after strong first quarter performance. states that it is. As you can follow on Cryptokoin.com news, the US central bank met these expectations on Wednesday and increased the Fed Funds rate to between 0.75% and 1%. While the Fed expects to increase interest rates aggressively in the next two meetings, some analysts are starting to see a limit in the central bank’s hawkish stance.
Yes, interest rates will continue to rise throughout the summer, but markets are looking for a peak of around 3%. Many analysts say that rising inflation will keep real interest rates relatively low, which is still a positive environment for the gold price.
Following the Fed decision, State Street Global Advisors chief gold strategist George Milling-Stanley said gold will continue to perform well in a low real interest rate environment as a key diversification tool. It brings an interesting perspective to the environment. The strategist makes the following assessment:
As I said earlier, gold has nothing to fear from rising interest rates. But stock markets are a different story. They will have something to fear from high interest rates. There are now more threats to the possible course of the stock market than to the gold market.
“The price of gold will rise above $2,000 by the end of the year”
Looking at the financial markets, the gold price has been around since March 22, when Powell started to indicate the central bank’s aggressive stance. fell 3.5% since then. During the same period, the S&P 500 fell 9%. The broad stock index fell nearly 14% for the year, while gold rose 4%.
It’s not just State Street that is rising under it. Wells Fargo’s head of real asset strategy, John LaForge, said in an interview that the goal of gold to rise above $2,000 by the end of the year is still ongoing, explaining:
We are in an environment where defense assets must perform well. The value is there. We are in the middle of a super cycle. I think this unpopular gold business will turn around.
