Commerzbank commodity analyst Daniel Briesemann analyzes the strength of gold after the US NFP data released last week, which came in well above expectations. Analyst’s market assessments and gold price predictions cryptocoin.com We have prepared for our readers.
Daniel Briesemann: Gold prices are showing relative strength right now
In the Commerzbank Report, Daniel Briesemann says that the US non-farm payrolls data, which exceeded expectations and could cause the Fed to be more aggressive, did not have much effect on gold prices:
Gold prices are currently showing relative strength and are trading around $1,810 at the start of the new week. Friday’s surprisingly strong US labor market report did not put any pressure on the yellow metal.
“There is increasing pressure on the US Federal Reserve to tighten monetary policy due to high inflation,” said Daniel Briesemann, according to Fed Funds Futures, with the market priced in additional Fed rate hikes in response to strong labor market data. The analyst continues:
Moreover, bond yields and real interest rates rose sharply. Real interest rates reached their highest level since June 2020. There was also a large ETF exit on Friday. But none of this has derailed the price of gold. Many speculative financial investors had previously withdrawn from the gold market.
“We expect the performance of gold to decline until the Fed’s first rate hike”
The analyst also notes that the CFTC’s statistics show that net long positions have dropped to around 50,000 contracts in the week leading up to February 1, which likely played a major role in the price drop during the reporting week. However, Daniel Briesemann, who says that the market is already adjusted to some extent, ends his assessment as follows:
This means that there is no further pressure on the gold price from this side. We will see how long gold can last in the current market environment characterized by rising interest rate hike expectations. However, it also turns out that gold is struggling to make any noticeable gains in the current market environment. We expect the gold price’s performance to decline until the Fed’s first interest rate hike, which we believe will take place in March.
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