Gold prices slumped as the US dollar revisits its 20-year high. The value of an ounce of gold, which closed last week at $ 1,883, dropped to $ 1,865. The value of gram gold has decreased below 900 liras and is at 898 liras at the time of writing. So what’s next? Here are the analysts’ expectations…
Gold price drops
Gold fell on Monday as the dollar hit a two-year high. This made dollar-priced bullion less attractive to other currency holders, while rising US Treasury yields put more pressure on prices. Spot gold fell 0.6 percent to $1,865 an ounce, while U.S. gold futures fell 0.5 percent to $1,864 an ounce. The dollar strengthened as investors sought security and returns amid slowing global economic growth and growing concerns about rising interest rates.
OANDA senior analyst Jeffrey Halley said, “A definitive break in the dollar index above 104.00 should be enough for gold to retest support at $1,850.” According to the expert, the test level of $ 1,835 may come after this level. Meanwhile, 10-year U.S. Treasury yields soared to their highest level since November 2018 on Monday, dragging zero-yield gold prices.
ANZ analysts: These are the main headwinds for the precious metal
Analysts in ANZ research wrote in a note, “Aggressive Fed rate hikes, faster quantitative tightening, stronger US dollar and Russia “The possible loosening of the ‘s occupation of Ukraine are possible main headwinds for gold prices,” he said. As we reported on Kriptokoin.com , some experts have reverted to the view that the US central bank is late in tackling low inflation, citing tightening financial conditions that began long before the Fed began raising interest rates in March.
Although gold is seen as a safe store of value in times of political and economic crisis, it is highly sensitive to short-term US interest rates and bond yields, which increase the opportunity cost of holding bullion. In the note, it was stated that concerns about global economic growth fueled by rapid inflation and rising geopolitical risks should somehow protect gold prices.
