Gold prices, which managed to hit three-week highs with the slight pullback in the US Dollar Index (DXY), are eagerly awaited how the ounce of gold will close the week. Meanwhile, analysts at ANZ Bank, a famous financial company, announced the prices they were expecting for the precious metal. Here are the details…
ANZ Bank analysts expect the gold price to rise to $1,950
According to economists at ANZ Bank, sustainable inflation increases the concerns of recession. This, in turn, is expected to benefit gold, which is seen as a hedging asset and safe haven. Therefore, according to experts, the Gold/Dollar pair (XAU/USD) could reach the $1,950 mark. Pointing out that “rising geopolitical risks should also protect the precious metal”, experts used the following statements:
Supply-driven inflation seems unlikely to be slowed down with interest rate hikes alone, and this should keep real rates favorable for gold prices. Slowing global economic growth and rising geopolitical risks should also protect the price. Gold has the potential to rise to $1,950. However, we expect it to find a base around $1,800.
What is the latest situation in the markets?
Gold traders awaited today’s US jobs report. Investors remain nervous as some fear the pace of monetary tightening in the US could plunge the world’s largest economy into recession. Signs of economic crisis could be supportive of gold demand as investors see it as a safe haven. But higher short-term US interest rates increase the opportunity cost of holding non-interest-bearing gold.
Analysts say gold prices are supported by global growth concerns, inflation concerns and the Russia-Ukraine struggle. But it opposes dollar strength and higher US bond yields. For example, Ravindra Rao, Head of Commodities Research at Kotak Securities, used the following statements:
Some upbeat US economic data and hawkish comments from Fed officials suggest that the Fed may continue monetary tightening despite growth risks. rekindled market expectations. ETF exits also showed that investor interest in gold weakened. Gold may be stuck in a range amid mixed factors. However, with the US dollar on the stronger side, the overall bias could be to the downside.
Are commodities coming under pressure?
On the other hand, while evaluating the growth outlook and monetary policy stance, it is noted that commodities lost momentum as a result of the volatility in the US dollar and stock markets. According to experts, we may see volatile trading continue, but the Fed’s monetary tightening stance may support the US dollar and put pressure on commodities. Regardless of analysts’ comments, time will tell which direction the precious metal will take.
