Strong US jobs data last week raised the possibility of an aggressive rate hike by the US Federal Reserve. As a result, the dollar and US Treasury interest rates rose. Gold prices, on the other hand, remained stable on Monday after losses in the last session. Analysts interpret the market and share their forecasts.
Stephen Innes: This is a situation that should be negative for gold
Spot gold held steady at $1,775 at press time after falling 1% in the previous session. U.S. gold futures slid 0.1% to $1,790.40. Stephen Innes, managing partner of SPI Asset Management, comments:
The market is still digesting the impact of the crashing jobs report in the US and how much it will affect the Fed. In this environment, gold got off to a quiet start. I think the increase in non-farm payrolls in July raises the possibility of a third 75bps rate hike in September. This is something that should be negative for gold.
Fed signals 75 basis points for September
Traders currently see a 73.5% probability that the Fed will continue to raise interest rates by 75 basis points for its next policy decision on Sept. 21. Due to the stunning US payrolls report, recession sentiments have taken a step back. The dollar index (DXY) rose to its highest level since July 28. This made gold more expensive for holders of other currencies.
Benchmark US 10-year Treasury yields hovered near their highest levels in more than two weeks on Friday. Fed Chair Michelle Bowman said on Saturday that the Fed should also consider a 75 basis point rate hike at its upcoming meetings to bring inflation back to its target.
Wang Tao: It is possible for gold to break the $1,767 support
While gold is seen as a hedge against inflation, rising US interest rates are blunting bullion’s appeal. cryptocoin.comAs you follow, this week’s focus will be on US inflation data. US CPI will be released on Wednesday.
Analysts say the data will give more clues about the Fed’s rate hike path. On the technical front, it is possible for spot gold to break the $1,767 support, according to Reuters technical analyst Wang Tao. Afterwards, the yellow metal is likely to drop to the $1,748-1,756 range.
TD Securities: The gold rally is ready for an important comeback!
Gold slumped to levels near $1,772 after much stronger-than-expected US NFP data. According to TD Securities strategists, traders are increasingly considering the possibility that the market is pricing in an early Fed axis, moving away from its current hawkish stance. Therefore, the gold rally is poised for a significant comeback. In this context, strategists make the following assessment:
The recent rally took gold from a July low of $1,681 to a high close to $1,795. In addition, money managers have reduced the risks of their recently acquired long. The rally is therefore highly likely to be reversed. The combination of hawkish statements from Fed officials and stronger-than-expected data are possible catalysts that could trigger additional selling in the days and weeks ahead.
Markets will soon be watching Wednesday’s US July CPI data, particularly the core CPI, as any persistent hint of inflation data in the system helps refute the early pivot argument, according to strategists.
Pablo Piovano: Other gains seem limited
Open interest on gold futures markets remained volatile on Friday, according to preliminary data from CME Group. Nearly 7,000 contracts were dropped. Volume, on the other hand, reversed two consecutive daily declines. Nearly 13.3 thousand contracts increased.
Gold prices fell just below the key $1,800 level in recent sessions. According to market analyst Pablo Piovano, Friday’s drop was behind the lower open interest rate. The analyst says this also means that further declines are limited. He also notes that it always shows the close target to be at the $1,800 level.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. 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.
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.