The US is waiting for investors’ interest rates for more direction. The price of gold fell on Wednesday with the return of US dollar and treasury interest rates.
What’s the reason why gold doesn’t move?
Kriptokoin.comAs we have included in the news, gold has been crushing water too much for the last few weeks. Ed & F Man Capital Markets Analyst Edward Meir explains the reason for this as follows:
I think people are a bit optimistic about some inflation data. We don’t see that gold really moves. The reason for this is that there is a perception that we are approaching the highest inflation. Gold needs to gradually see higher inflation data.
As it is known, investors use the ingot as protection against inflation. However, it increases the opportunity cost of keeping the asset without higher interest rates. Meanwhile, the central banks began to tighten the monetary policy to cool increasing prices. This largely limited the gains of gold.
Ilya Spivak: Gold price may fall next year
The Reuters survey shows that the US core consumer price index (CPI), which will be announced on Friday, will increase by 5.9 %during the year. As it will be recalled, CPI increased by 6.2 %annually in April. Dailyfx Foreign Currency Strategist Ilya Spivak says:
If the basic y/y ratio falls as well as (or less) in a modest way, the price of gold will decrease as an interest rate hike bets for restructuring next year.
“To date, the gold price, S&P 500 index, has left behind”
The World Bank reduced the 2022 global growth forecast on Tuesday to 2.9 %. The price of gold was closed on Tuesday with a modest rise on Tuesday, with the recovery of precious metal losses. In this environment, investors are preparing for the second half of the year. In addition, the US inflation update from the consumer price index on Friday will be a major focus.
In 2022, stocks, bonds and many other financial assets came under sharp pressure. So there are very few places to hide for investors. Gold is presented as an alternative that can add diversification and help protect investors from high inflation in the second half of the year. State Street Global Advisors Chief Investment Strategist Michael Arone is led by a team, making the following assessment:
To date, the Gold has left the S&P 500 index SPX behind+0.95 %and 14.17 %. He also showed his ability to protect against decline in the stock market.
However, strategists recommend investors to focus on institutional basis and limit the time. Strategists say that the volatility may remain high in the second half of the year, as the Federal Reserve tries to further tighten the financial conditions to restore inflation. For this reason, strategists recommend investors to evaluate inflation -sensitive alternatives, including gold.
“These restrict the upward movement of gold”
KİTCO analysts evaluate the modest gains of gold on Wednesday. According to analysts, yellow metal recently moved towards $ 1,800 ‘bargaining hunting’ began. They also show weak US stocks and stubborn inflation concerns as the causes of the movement.
However, Commerzbank commodity analysts say that the upward movement of gold is restricted. The reason for this is that they show DXY’s power. They also add the 10 -year treasury interest on 3 %threshold.
“The biggest denominator of the gold price movement is US inflation data”
Naeem Aslam from Avatrade says that the precious metal trade is largely inanimate. “The US may be announced on Friday, inflation data for the Analyst, Analyst Analyst says. Naeem Aslam says:
US inflation data will be announced on Friday. This continues to be the biggest denominator of the gold price movement.
