Gold prices continued their gains on Thursday with double-digit gains on the weak US dollar index (DXY) and recession fears. Master names interpret the markets in the light of the latest developments and data and share their forecasts for gold prices.
Carsten Fritsch: The rise in gold prices is remarkable!
Gold rose sharply with August gold trading at $1,873.30, up $24.60 on the day. Earlier this week, gold was near the $1,830 level. Meanwhile, the US dollar index fell 0.61% to 101.87 on Thursday. Commerzbank analyst Carsten Fritsch makes the following assessment:
Gold prices continue the recovery they started yesterday after falling below $1,830. The rise is even more striking, given that the gold ETFs tracked by Bloomberg also posted 2.7 tons of output yesterday.
“Any weakness in data could help gold”
Gold investors reported Thursday that US private payrolls rose just 128,000 in May. ADP focused on employment data, which showed it was the lowest gain since the start of the pandemic recovery.
This data is always high on investors’ radars as it provides a glimpse into Friday’s nonfarm payroll data. Any weakness in the data could help lower the Federal Reserve’s hawkish stance and push gold prices higher, according to analysts. In this context, Carsten Fritsch says:
Fed Fund Futures is currently the US Fed’s next two meetings with a 50 basis point rate hike each and 2.8% by the end of the year. indicates a key ratio.
Jamie Dimon: A hurricane, not an approaching storm!
As you can see in the news of Cryptokoin.com , concerns about slowing growth in the face of an aggressive Fed are driving serious recession fears. The latest harsh warning came from JPMorgan Chase CEO Jamie Dimon, who briefed the crowd about the impending economic ‘hurricane’ at a financial conference in New York. Dimon refers to:
You know, I said there are storm clouds, but I’ll change it, it’s a hurricane. You’d better prepare yourself. JPMorgan is bracing itself and we will be very conservative about our balance sheet. And while economic conditions look ‘good’ at the moment, it is still unclear whether it will be a ‘small’ hurricane or a ‘Super Hurricane Sandy’. It’s a little sunny right now, things are going well, everybody thinks the Fed can handle it. That hurricane is right there, down the road, coming our way.
The two most important risks Dimon is concerned about are the Fed’s quantitative tightening (QT), which began on June 1, and the impact of the war in Ukraine on commodities. Dimon isn’t excluding oil, which is $150 or $175 a barrel.
“Gold prices managed to hold high despite a hawkish Fed”
The effects of the Fed’s QT must be monitored, according to commodity strategists at TD Securities . Of course, this is not a surprise, according to the strategists who said, “Quantitative tightening is finally starting and liquidity conditions have already deteriorated significantly.” Strategists explain:
But stressing that the flow effect of QT still has some bite and could exacerbate price action in all assets as liquidity evaporates. For now, gold prices have managed to maintain highs with the consensus position still sloping to the long side despite a hawkish Fed narrative.
Jeffrey Gundlach loading into the Fed’s inflation narrative
DoubleLine CEO Jeffrey Gundlach, US Treasury Secretary Janet Yellen’s After admitting that he was ‘wrong’ about where inflation is headed, he’s loading up on the inflation narrative. Jeffrey Gundlach, on Twitter, says:
Excessive stimulus caused inflation. A clever twelve-year-old could guess that. Long-time Fed Chair Ms. Yellen…..yes, the Fed Chair…conceded not today. On the bright side of inflation, and that’s a very bright side, Build Back Biden hasn’t passed.
Excessive stimulus caused inflation. An intelligent twelve year old was able to predict it. Ms. Yellen, long serving Fed Chair…..yes, Fed Chair,…admitted today she was not. On the inflation bright side, and it is a very bright side, Build Back Biden did not pass.
— Jeffrey Gundlach (@TruthGundlach) June 2, 2022
Gundlach also hopes that he doesn’t get more stimulus from the Fed as the economic downturn comes.
The long-term dark side of inflation is that in the impending crisis (and there’s always a downturn) the government’s response will almost certainly be more free money. Much more.
The dark side of inflation longer term is that in the coming downturn (and there is always a coming downturn) the response from government is almost assuredly going to be more free money.
Lots more.
— Jeffrey Gundlach (@TruthGundlach) June 2, 2022
Edward Moya: Gold prices can benefit from safe harbor flows
OANDA senior market analyst Edward Moya says gold has captured its safe-haven offer this week as market participants fret over the economic consequences of the Fed’s excessive rate hikes.
Gold is returning to safe-haven flows as investors fear the Fed won’t ease its rate hike campaign anytime soon. Edward Moya comments on the issue:
Wage pressures in the US are not easing and this may continue inflationary pressures for a few more months. The war in Ukraine may see an escalation after the US signals. Because they will give Ukraine advanced rocket systems.
Gold prices technical analysis by Jim Wyckoff
Senior analyst Jim Wyckoff, who looks at the technical view of gold prices, said that August gold prices will increase in four quarters. states that it is preparing for the highest close of the week. “The 11-week price downtrend on the daily bar chart has been at least temporarily rejected,” said the analyst, describing the struggle of the bears and bulls as follows:
The bears still generally have the technical advantage in the short term, but the bulls have gained momentum. The bulls’ next upside price target is to produce a close above solid resistance at $1,900. The bears’ next short-term bearish price target is to push futures prices below solid technical support at $1,800. Initial resistance is seen at $1,882.50 followed by $1,900. Initial support is seen at $1,850 followed by this week’s low at $1,830.20.
