Striking forecasts for gold prices keep coming. Especially after the FED’s interest rate decision, the markets are now looking at the price movement of gold. Let’s see which predictions about gold came to the fore.
Peak emphasis for gold prices
TD Securities economists expect Gold price to peak after the Fed meeting. According to analysts, gold prices will average $ 2,100 in the last three months of this year. On the other hand, the data remains strong enough to support the Fed’s interest rate forecast. But there is also the issue of exceeding technical support. In this case, the yellow metal could drop below $1,900 in the not-too-distant future. The outlook for the yellow metal is positive as the world thinks the Fed will not pull the trigger twice as the ‘meaningless’ median points suggest. Also, gold prices could soar with any data showing that inflation pressures are easing and the economy is shifting gears.
Analysts predict that gold prices will average $2,100 in the last three months of the year. Because there is a possibility that the US central bank will lower interest rates later. And they will likely do so before they reach their two percent inflation target. On the other hand, the approaches of legendary commodity investor Dennis Gartman are remarkable. Accordingly, the rise of gold prices after the banking crisis failed. On the other hand, this situation caused the gold bulls to fail again. Gartman says the SPDR Gold Trust ETF (GLD) is still holding above its 200-day moving average of around $172. However, this level was above $190 at the beginning of May. According to him, this fall is enough to shake the faith of even the hottest bulls.
Bitcoin gold rate
Gartman also looks at the Bitcoin/Gold Ratio. Accordingly, he states that the precious metal has held up better than the top cryptocurrency in recent weeks. According to Gartman, gold has outperformed Bitcoin. Gartman also covers yesterday’s Fed rate decision, which is the biggest economic news of the week. Accordingly, he states that the central bank did not surprise anyone by not changing the Fed funds rate. But he stressed that he surprised a large number of market participants by raising his “dot charts” quite hawkishly.
Gartman also notes that as early as July, and perhaps even August, the Fed gave itself the freedom to raise interest rates further. On the other hand, investors who want to speculate on gold will need to be agile, according to one market analyst. Because the fundamental factors in the market continue to be quite nuanced. Gold prices below $2,000 are somewhat undervalued, according to modeling by Huw Roberts, head of analytics at Quant Insight. But he stresses that there is still little faith in the market. He says this is a continuation of the “wait and see” sentiment that has plagued the precious metal for the past few months.
neutral look
The neutral outlook emerged as gold prices remained in neutral territory around $1,970. Even though the Federal Reserve did not change interest rates, gold prices saw a strong selling pressure. According to QI’s modeling, the biggest factor driving the broader financial market landscape, including gold, is interest rate volatility, Roberts said. In the case of precious metals, interest rate volatility must decrease for gold prices to rise. Quant Insight remains neutral on gold. But Roberts said there are potential risk events that could bring gold’s safe-haven appeal back to the market.
More broadly, in the short term, gold prices remain sensitive to credit spreads, Roberts said. He added that if credit spreads start to widen due to economic fears, gold may attract some bullish interest. “Conditions are still positive,” Roberts said. However, the price point is something to be considered. If you had to be undecided, you could take a small long position below it. But right now we don’t have a big strategic buy or sell signal as the picture is so nuanced.” uses the phrase.
Different opinions of members
Analysts are questioning the Fed’s dot chart forecasts. Accordingly, they predict that gold will consistently rise above $2,000 per ounce. Accordingly, analysts are expecting a rise in the precious metal. The Fed held interest rates steady in the 5% to 5.25% range on Wednesday, after raising rates ten times in a row. Federal Reserve Chairman Jerome Powell said the median point chart allows for at least two 25 basis point rate hikes this year. Some analysts have criticized the contrasting views of Fed officials, noting that these assumptions are often unreliable.
“One year ago today, the FOMC’s median point for 2023 was close to 3.75%,” said Daniel Ghali, senior commodity strategist at TD Securities. This is a reminder that these rate forecasts have little impact on future rate decisions.” said. Members have different opinions on the Fed’s dot chart forecasts. For example, two FOMC members support no further increases for the remainder of this year. On the other hand, four emphasize that they expect another increase. Nine also state that they saw two more increases, while two predicted three increases. Finally, someone says he supports four additional rate hikes. Even Powell points out that the dot plot is just an individual assessment. “We always write at these meetings what we think the appropriate final rate will be at the end of this year,” Powell said. In reality, this ratio may be lower or higher. I can’t say I have too much confidence that we can see where the federal funds rate is going to be this early.” uses the phrase.
Effects for gold prices
The market is known to take cues directly from the dot chart and the tone of the Fed. The June decision of the FED is expressed as hawkish. However, Melek states that its impact on the markets and its negative connotation for gold will be short-lived. “The data did not show that the US economy has weakened significantly. Therefore, no one knows when macro conditions will collapse. The market will likely accept the US central bank as it is. This could be bad for gold. That’s because the data remains strong enough to support the Fed’s interest rate forecast. Also, what will happen to gold if technical supports are exceeded? Gold prices could drop below $1,900 in the not-too-distant future.” says.
More data confirms the slowdown in the US economy. Accordingly, it will become clearer that the Fed cannot afford to raise interest rates any further. In such a case, gold will continue its rally. Melek added that a jump to $2,100 an ounce could be in question. On the other hand, ING chief international economist James Knightley makes statements on the subject. “The Federal Reserve’s hawkish stance yesterday suggests it tends to increase again in July,” Knightley said. But today’s mixed retail sales and manufacturing data offer no clear direction. The rise in unemployment claims is perhaps the biggest story. But it probably won’t be enough to cause a major slowdown in payroll growth to deter the Fed just yet.” is emphasizing. Finally, analysts said the levels that gold investors should watch on the downside are $1,935, $1,900 and $1,890 per ounce. cryptocoin.com On the other hand, Comex gold contracts for August delivery are trading at $1,970.50 an ounce, up 0.08% daily.
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