The gold market has followed a stable course so far in June. It traded at $1,940 per ounce, just under $2,000. However, analysts warn that gold is ready for a more significant move after weeks of sideways price action.
Gold on the brink of major move
Everett Millman, precious metals specialist at Gainesville Coins, makes important statements. It indicates that the movement can happen in both directions. “Gold has been flat for long enough,” Millman said. It’s time for a bigger move, positive or negative. Retesting the $1,880 level or returning to around $2,000 is on the cards.” says. cryptocoin.com As we mentioned earlier, the Fed announced its interest rate decision on Wednesday. Accordingly, he confused the markets with the promise of a “hawkish break” and two more rate hikes. “What the Fed did was neutral for gold,” Millman said at this point. A pause in the rate hike is good for gold. But it was the most hawkish decision we could have made. That’s why gold was flat.” is emphasizing.
OANDA senior market analyst Edward Moya points out that gold is resilient. “The Fed has locked itself on hold because it signaled before the meeting that it would do so,” Moya said. There was a communication error that Fed Chairman Jerome Powell made in the weeks leading up to this decision. Otherwise, the data supported the increase.” Says. Moya, at Powell’s press conference, stated that the US central bank will stick to the data, adding that it did not commit to raise interest rates in July. Moya’s highlights are as follows:
“Fed Chairman Powell is trying to keep optionality on the table. Softer inflation data are likely to continue to arrive. He doesn’t want to lock himself up. That’s why gold isn’t at $1,900. Had the Fed’s dot chart been confirmed at the press conference, gold would have been trading at $1,900.”
What are the markets pricing?
Markets are currently pricing in another rate hike only in July. Analysts said that if this situation changes, gold will react. Meanwhile, gold follows macro statements and the US dollar closely. In addition, precious metals investors are also watching central bank gold buying activities slow in the second quarter. “Although it has slowed somewhat, the World Gold Council survey said one in four central banks plans to continue buying gold,” Millman said. They buy in large quantities. Gold will respond to what central banks do.” says.
Millman emphasizes that there is still a significant selling risk in the gold market. He states that this will be symmetrical to what happened in the last two years, when gold reached $2,000 per ounce. He states that the next most likely move for gold will be lower.
What will happen next week?
Markets await Powell’s two-day statements before the House and Senate next week. It’s also tracking the rankings of Fed speakers and more macro data. Macro data may energize the market as the Fed will be entering its July meeting largely data-driven. On the other hand, Nicky Shiels, head of MKS PAMP metal strategy, points out that the gold price has become sensitive at this point. At this point, data is important. Data will become more sensitive and important towards the July meeting, when an increase is almost guaranteed.
It is also very important to monitor the technical transactions of gold. Shiels stated that the longer the precious metal remains stable in the face of this hawkish pressure, the more likely it is that prices will rise. At the time of writing these lines, Comex gold futures for August delivery were trading at $1,968.20, down 0.13% daily. It was also mostly flat on a weekly basis. The following data will be tracked next week:
- Tuesday: US building permits and housing starts.
- Wednesday: Fed Chairman Powell to make a statement.
- Thursday: Bank of England interest rate decision, Fed Chairman Powell statements. US unemployment claims, US current home sales.
- On Friday: US manufacturing index.
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