Gold still faces a determined Fed tightening policy and a strong US dollar. What’s next for gold, which is standing at $1,786 at the time of writing and hasn’t been able to maintain its position above $1,800? Here are the comments of famous analysts…
ANZ Bank: Gold risks falling to $1,700
Failure to hold above $1,800 could renew downward pressure below it, experts say. According to ANZ Bank analysts, the price of gold could drop below $1,770. In such a case, support may not be found up to $1,700. The bank’s analysts use the following statements:
Wednesday’s candlestick pattern gave a bearish signal as the price opened and closed near the daily lows. Prices are close to the 50-day moving average. A break below this suggests that the price could drop back to the $1,750 range. If prices drop in the downside channel, the market could come under increasing pressure. A pressure in the downtrend range could cause the price to drop below $1,700.
HSBC: Gold on the defensive against the Fed and strong US dollar
According to HSBC analysts, if market sentiment turns to 50 basis points instead of 75 basis points, the short-term decline for gold may be capped. According to analysts, the Fed is still determined to raise rates to combat rising prices. Also, the US dollar looks solid. Therefore, current factors are negative for gold. “The outlook for Fed policy and global growth is likely to support the USD in the short to medium term,” HSBC says.
Increasing yields, strong USD, quantitative tightening and the end of significant fiscal spending in most economies; constantly opposes the rise of gold. However, this may change if confidence in monetary authorities declines. Gold prices are sensitive to real returns, especially to the US 10-year real returns. A cap on how high the real yield can rise could reduce the negative impact of tighter monetary policies on gold. Geopolitical risks can also provide some support to gold.
What do futures signify?
Interesting results emerge, given the advanced data from the CME Group for the gold futures markets. Traders increased their open interest by 2.4k contracts for the second session in a row on Thursday. Volume, on the other hand, reversed two consecutive daily gains. Nearly 40.4 thousand contracts were reduced. Gold prices fell amid rising open interest on Friday.
TD Securities: Sellers are concentrated under
The XAU/USD pair maintains its corrective momentum as it stays below the $1,800 mark. Finally, in the view of strategists at TD Securities, gold’s price action may indicate significant selling interest. TD Securities analysts use the following statements:
The failure of gold to break a significant threshold due to a loss in the much-anticipated US inflation data may indicate significant selling interest. Strong physical demand may have exacerbated the short-term rally sparked by President Powell’s FOMC speech. But we are seeing evidence that China’s gold bid continues to loosen. The bar continues to rise for additional CTA purchases. Prices now need to rise above $1,830 to speed up buying.
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