Expect These For The Gold Price In The Next Weeks!

The gold price fell as the US Federal Reserve (FED) signaled for faster rate hikes. However, it rebounded from a three-week low on Friday after the release of data showing slower-than-expected US job growth to close the week at around $1,790. So, what kind of movement can be expected in the precious metal in the coming weeks?

What are the expectations for the gold price?

UBS analyst Giovanni Staunovo said: “Fewer jobs added in December than expected, but the US unemployment rate fell to a multi-year low; “Somehow it was a mixed report for gold.” Standard Chartered analyst Suki Cooper said: “A stronger-than-expected pressure was more likely to lower prices, but weaker pressure did not significantly change market rate hike expectations. “The gold price response shows that the market is more focused on inflation risks ahead of the FOMC meeting.”

cryptocoin.com As we reported, Fed minutes released on Wednesday showed officials discussing reducing the central bank’s total asset purchases and raising interest rates earlier than expected to fight inflation.

Is the appetite for gold dulling?

The price of gold has suffered its worst loss since Thanksgiving week, even as it gained on Friday after a report on the US labor market showed the country created 199,000 new jobs in December. Jeff Wright, chief investment officer of Wolfpack Capital, stated that this figure is a huge loss. 199,000 new jobs in December came in, well below the economists’ estimate of 422,000 jobs surveyed by The Wall Street Journal. “My biggest concern is wage inflation,” Wright said, and used the following statements:

Overall, if the Federal Reserve is most concerned with inflation, then these data are problematic. If the Fed values ​​higher employment levels and increases labor force participation rates above 62.5 percent, it’s not problematic. This is why the reaction underneath is initially silent.

Wright knows that the market Fed’s tapering is moving along with monetary tightening, but says that “mixed signals have recently become a backdrop for gold.” According to Wright, for now, until the direction is determined, the price of gold will be traded in the range of $ 1,750 to $ 1,825 an ounce. Meanwhile, the 10-year US Treasury bond traded near the highest levels since the end of March 2021. This is thought to blunt the appetite for precious metals.

All eyes on US CPI data

Naeem Aslam, chief market analyst at AvaTrade, said that “traders are not aware that the Fed is currently serious about controlling inflation and is adopting a tight monetary policy as a result,” said gold’s weight is declining. Indeed, the minutes of the Fed’s last meeting in 2021 showed that policymakers may be inclined to take a more aggressive path. Aslam thinks traders haven’t seen the Fed change its monetary policy path, even after Friday’s jobs data. “Expectations are still for three rate hikes this year, which keeps the gold price in check,” he said.

Finally, Insignia Consultants research director Chintan Karnani said investors will be looking at inflation figures and trends in the US stock market next week to see the next move in gold prices. US consumer price index data for December will be released on Wednesday.

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