Gold prices soared on Tuesday, supported by safe-haven purchases amid a pullback in the dollar and concerns about an economic slowdown. Analysts interpret the market and share their forecasts.
“It will be a struggle to maintain the upward movement”
Surveys on Monday showed a deepening cost of living crisis. It also revealed a bleak outlook that keeps consumers cautious about spending. The eurozone is almost certainly in a recession. There have been reports that Russia will close the Nord Stream-1 pipeline, Europe’s main supply route. This has fueled fears of a recession in the region as consumers suffer from rising energy prices.
Spot gold was trading at $1,711.85, up 0.2% at the time of writing. U.S. gold futures rose 0.04% to $1,720. Meanwhile, the dollar index (DXY) was unchanged after hitting a 20-year high in the previous session. Daniel Hynes, senior commodity strategist at ANZ, comments:
There has been some safe-haven buying stemming from this type of unfolding energy crisis in Europe. However, given the hawkish Fed we have, it will likely be a struggle to sustain any upward movement.
“Spot gold may retest resistance at $1,727”
Investors will now watch the European Central Bank’s interest rate move at its meeting on Thursday. In addition, the markets expect a major interest rate hike from the Fed’s policy meeting on September 20-21.
Gold is accepted as a measure against inflation and economic uncertainties. High U.S. interest rates increase the opportunity cost of holding non-yielding bullion. Spot gold is likely to retest the resistance at $1,727, according to Reuters technical analyst Wang Tao. A break above this is likely to result in gains of up to $1,736.
“A break below $1,680 is very likely for gold”
cryptocoin.com As you follow, US data pointed to moderate wage growth in August. In addition, the data showed that the unemployment rate rose to 3.7% and the labor market began to loosen. After that, the shiny metal had its best day in nearly a month on Friday. Craig Erlam, senior market analyst at OANDA, comments:
Expectations for future Fed rate hikes softened slightly. But the employment report will need to be paired with good inflation data to have any significant impact. For now, it is possible to see some support for gold above $1,700. However, the downward pressure is likely to continue as the dollar is so favored and central banks do not loosen the brakes. Therefore, a break below $1,680 looks very likely.
“I will follow the $1,700-1,728 range in gold price”
Gold market expert İslam Memiş also shared his predictions about gold prices. Memiş notes that September is very important for the markets. Because, amid rising inflation and recession fears in Europe, the ECB will announce its interest rate decision. In addition, there is the Fed’s interest rate decision, which is of vital importance for the markets. Taking this environment into account, İslam Memiş makes the following statement:
We will see both bottoms and tops in September. I will follow the $1,700-1,728 range below. Investors who have business with gold need to know this band gap.
