Gold prices fell as the dollar strengthened and bond yields rose. While the two giant banks share their forecasts for gold prices, analysts interpret the market.
Standard Chartered recommends incremental purchase
Is there a buying opportunity after the last drop in gold? According to strategists at Standard Chartered, gold appears to be oversold. For this reason, strategists recommend adding to positions in the yellow metal. In this context, strategists make the following statement:
Gold settled below the strong support at $1,840; The next support is aligned at $1,810, then $1,780. Considering that gold is starting to be oversold, it seems logical to gradually add positions to gold (especially those who are underinvested). Also, central bank demand remains strong and we expect this to continue to support gold prices. In our view, the recovery in real yields and the USD will likely match the easing of headwinds against gold. The bright metal can also act as an attractive hedge against short-term volatility from geopolitical tensions.
Commerzbank lowered its first half gold forecast, but…
cryptocoin.com As you’ve seen, this week’s focus was on strong US economic data raising bets on further Fed rate hikes. In addition, the minutes of the January meeting of the Federal Open Market Committee were released on Wednesday. Money market participants expect reference rates to rise to 5.3% in July and remain close to these levels throughout the year.
High interest rates and bond yields discourage investors from investing in non-yielding assets such as precious metals. Also on the radar will be the US gross domestic product data, which will be released on Thursday, and the core PCE price index data, which is scheduled for Friday. In this environment, Commerzbank lowered its gold price forecast for the first half of 2023 to $1,800. However, the Bank expects gold to gradually rise to $1,950 in the second half.
“We are witnessing a sharper risk aversion in the market”
Spot gold was down 0.15% at $1,832.78 at the time of writing. U.S. gold futures fell 0.4% to $1,842.50. Meanwhile, the dollar index (DXY) has approached a six-week high, making gold more expensive for other currency holders. Also, benchmark US 10-year Treasury yields rose to a three-month high. Jim Wyckoff, senior analyst at Kitco Metals, comments:
These are bearish outside of market forces. At the same time, we are witnessing a sharper risk aversion in the market working against gold and silver at this point in the day.
