Gold prices slumped on Monday, retreating from a more than five-month high in the previous session as cautious investors assess whether rising inflation will prompt a more aggressive response from central banks. Analysts commented on the next levels.
Analysts drew attention to the Fed’s inflation data on gold prices.
Spot gold fell 0.1 percent to $1,863 an ounce as of writing. According to Stephen Innes, managing partner at SPI Asset Management, a stronger dollar will affect the Fed’s decision on short-term U.S. Treasury yields and interest rates. Neel Kashkari, Chairman of the Federal Reserve Bank of Minneapolis, said on Sunday that he expects higher inflation in the next few months. However, he stated that he thinks this is temporary. Warren Patterson, head of commodity strategy at ING, used the following statements:
Inflation data provided a boost for gold. However, prices could drop to $1,700 through 2022 as rising inflation will likely mean central banks will accelerate the pace of monetary tightening.
Hareesh V, head of commodities research at Geojit Financial Services in Kochi, India, said the Fed is unlikely to contract aggressively for now, given a gradual recovery in the labor market that supports gold. After consumer sentiment hit its lowest level in a decade, cryptocoin.com As we have also reported, market participants are awaiting Tuesday’s US retail sales data.
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