“Big Drop” 4 Analysts Shared the Next One for Gold Price!

Gold price calmed down on Tuesday, supported by a pullback in the US dollar. But investors avoid making big bets ahead of key central bank meetings. Therefore, yellow metal prices remained in a narrow range. Analysts interpret the market and share their forecasts.

Jeffrey Halley: Bigger drop is imminent for gold price

Spot gold was trading at $1,714, up 0.28% at press time. U.S. gold futures rose 0.14% to $1,712.5. Meanwhile, the dollar fell 0.5% against its rivals. This, in turn, made dollar-priced bullion cheaper for buyers holding other currencies. Jeffrey Halley, senior analyst at OANDA, comments:

Gold remains in a coma. Yellow metal fails to sustain gains above $1,720. What’s more, the US dollar is failing to recover even as it plummets overnight. This keeps the technical picture of gold very negative. Initial support is at $1,700. However, a sustained break and a multi-day close below $1,675 indicate a much larger decline is in question.

SPDR Gold Trust at lowest level since start of the year

According to CME’s FedWatch Tool, expectations for a 100 basis point rate hike at the Federal Reserve’s policy meeting next week have remained at around 30% this week after hitting 80% last week. Gold is accepted as an inflation hedge. Therefore, higher interest rates increase the opportunity cost of holding noninterest-bearing bullion.

As you know, SPDR Gold Trust is the world’s largest gold-backed exchange-traded fund. Meanwhile, SPDR shares fell 0.5% to 1,009.06 tons on Monday. SPDR said this was the lowest level since the end of January.

Edward Moya: Gold investors a little optimistic

Last week, the price of gold hit a one-year low due to the extreme rise of the dollar. Edward Moya, senior analyst at OANDA, comments:

We see a pretty good recovery for gold as the dollar weakens. The debate is currently between a 50 to 75 basis point increase by the Fed. Therefore, gold investors are somewhat optimistic.

Andrew Schrage: Not enough offers for gold at the moment

A strong dollar is likely to create a headwind for commodities priced in the currency. This makes commodities more expensive for users of other currencies. Andrew Schrage, CEO of Money Crashers, makes the following statement about the developments in the market:

Under persistent inflation pressure, the appetite for safe-haven purchases has been stifled by the declining purchasing power of international buyers. With the dollar this strong, there are currently not enough offers for gold.

“Long-term bullish situation for gold price is possible under these conditions”

Schrage says the real question for gold bulls is whether to get inflation under control before the dollar peak. In this context, the analyst says:

If the dollar weakens from here, expect less downside risk. A long-term bullish situation for gold requires sustained dollar weakness, chronic geopolitical instability, or some sort of technological catalyst that significantly increases industrial demand for the metal.

Can the gold price gain enough momentum to break above $1,800?

However, Kinesis Money market analyst Rupert Rowling notes in a note that DXY’s drop of 0.7% gives gold “an opportunity to regain some of the ground it lost last week.” By the way cryptocoin.comAs you can follow, the dollar rally took a breather on Monday. However, DXY is up more than 11% year-to-date. Rowling explains the impact of the developments on the gold price as follows:

However, a strong dollar, an ally of central banks looking to keep raising interest rates, creates a challenging environment for gold to make much headway. After the dramatic declines in recent weeks, it is difficult for the precious metal to gain enough momentum to climb above $1,800.

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