After the Federal Reserve increased interest rates by 25 basis points in line with expectations, gold started to rise again with the signals of Fed Chairman Jerome Powell that the Fed will stop. Standard Chartered economists predict a rebound, while Credit Suisse strategists expect further upside should a critical level be broken.
Are more upsides possible in gold price?
Gold briefly retested the $1,973/98 level. According to the report by Credit Suisse strategists, a breakout from here could cause the yellow metal to gain further upside momentum. In this context, strategists make the following statement:
A sustained move above $1,973/98 is needed to pave the way for a retest of long-term resistance from the record highs of $2,070/75 in 2020 and 2022. While this should clearly be respected, a clear and sustained break higher would open the door to the next $2,300 move. Ideally, the 55-DMA currently seen at the $1,881 floor of the market. If this breaks, we could see more weakness towards the $1,805 low range before the critical 200-DMA, currently seen at $1,778 and which we expect to form the floor once again.
There is a possibility that gold will rise in the very short term, but…
Gold tends to provide a positive return when there is short-term stress in the financial system. However, Standard Chartered economists expect the yellow metal to return to $1,875 in the coming months. Economists explain their views on this issue as follows:
Investor positions are far from extremes. This suggests that it is unlikely to stand in the way of further gains. These indicate that gold is likely to rise in the very short term, especially if banking sector fears persist. Having said that, we realize that gold helps reduce volatility over relatively short-term horizons. Over a longer period of three months, we will not be overly following recent gains. Instead, we’ll wait for gold to re-set around $1,875.
Fed gives pause signals, gold price rises
Gold is aiming for a new war at $2,000, expanding Federal Reserve (Fed)-promoted gains between bearish US Treasury yields and the US dollar. It’s worth noting that waning fears over banking turmoil also seem to be supporting gold prices lately, despite US Treasury Secretary Janet Yellen’s rejection of ‘comprehensive insurance’ for deposits.
With this, cryptocoin.comAs you follow, the Fed provided a rate increase of 25 basis points (bps). However, the interest rate decision and the dot chart raised concerns about dovish movements in the future. That, in turn, choked the US dollar despite Fed Chairman Jerome Powell’s rejection of calls for rate cuts in 2023. Looking forward, there are second-tier statistics and monetary policy moves by the Bank of England (BoE) and the Swiss National Bank (SNB). According to analysts, these moves could entertain gold traders as bulls await more dovish rate hikes amid the current banking crisis.
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