There were important developments for gold prices this week. The US House of Representatives passed legislation to raise the debt ceiling. The economic crisis was narrowly over. But what does this mean for the gold investor? cryptocoin.com Let’s look at the details.
Risks for gold prices
The debt ceiling passed the House of Representatives with a 75% majority late Wednesday evening. The Senate is due to vote on the bill on Friday. On the other hand, President Joe Biden is expected to sign it before the US Treasury Department’s June 5 deadline. According to some analysts, the last-minute deal that prevented a major economic crisis puts a negative impact on the gold price. Accordingly, there is a downward movement in gold prices. However, some analysts say that more important problems are still at play.
Currency analysts at Brown Brothers Harriman stress that the deal removes a headwind for the US dollar. After all, they say that this will put pressure on gold. For now, price movements suggest that the precious metal has outlived the soon-to-be-settled debt ceiling debate. Gold prices are testing the $2,000 per ounce resistance again. Gold futures for August delivery are last trading at $1,997.40 an ounce, up 0.77% daily. Analyst Jim Wyckoff points out that the debt ceiling deal will be neutral for gold. Naeem Aslam, chief investment officer of Zaye Capital Markets, is looking at the monetary policy meeting. It indicates that the decisions to be made here are important for gold.
The storm in the teacup
Natish Shah, head of commodity research at WisdomTree, says gold prices have not reacted much to the deal. Because he says investors are waiting for politicians to reach a solution. On the other hand, he adds that short-term price action is “a storm in a teacup.” Shah looks beyond the near-term volatility. Accordingly, he said, gold could perform well as the Treasury Department unleashes a flood of debt to meet its payment obligations. Shah added that although a geopolitical risk is narrowly circumvented, there are still many reasons to keep gold as an insurance policy. He stressed that an impending recession remains a real threat.
On the other hand, according to Greg Sharenow, general manager of Pimco, gold prices are overvalued. Sharenow said that gold is an asset with a maturity of 25 years. The long-term outlook for the precious metal remains bullish as central banks move away from US dollar holdings and continue to increase their gold allocations. Sharenow notes that there is an “enormous amount of interest” from central banks. Accordingly, he said that record purchases helped raise gold prices. Finally, Sharenow states that the US central bank will not be able to lower interest rates easily, as inflation remains well above the Fed’s target of 2%. Ultimately, he says, this will put pressure on the precious metal.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.