The gold market continues to struggle in uncertainty and is unable to keep financial gains above $1,750 an ounce. Gold price fails to hold on to gains after second month of disappointing US labor market data. Although the precious metal managed to climb to a two-week high for a short time, it failed to break the resistance at $1,780 per ounce.
“Fed’s monetary policy will continue to influence gold price”
According to experts, the market is suffering because investors continue to focus too much on US monetary policy. While September’s nonfarm payrolls data didn’t meet expectations, many economists said it wouldn’t prevent the Federal Reserve from reducing monthly bond purchases until the end of the year. According to economists, the Federal Reserve is on track to change its monetary policy and this will continue to put pressure on gold prices. Rising inflation pressures did not help gold prices either. With a global energy crisis looming, oil and gas prices are at their highest in several years. As a result, some economists expect inflation pressures to be much more stringent than central banks expect.
“Rising inflation does not provide any support for gold because it prompts market players to price more aggressive action from central banks,” says gold analyst Neils Christensen. The CME FedWatch Tool shows markets are pricing in a small chance of rate hikes through June 2022. “But before all gold investors start throwing in the towel and liquidating their holdings, I would like to point out that a lot can happen in the next 12 months,” Christensen said. “I think markets are exaggerating how aggressive the Fed and other central banks like the European Central Bank can be in tightening interest rates.”
Forecast of $5,500 from Jefferies Investment
Another noteworthy report this week came from Jefferies Investment Group. Despite all the short-term weaknesses and volatility, the investment firm continues to indicate that gold will be bullish in the long-term. cryptocoin.com As we have also reported, they said they saw gold prices rise to $5,500 per ounce in the long run. Their reports include the following statements:
The long-term view here remains the same as it has been for years. So, most importantly, the G7 central banks, including the Federal Reserve, will not, and will eventually remain, benign exit from unconventional monetary policy. Continuing in one way or another, the central bank is determined to expand its balance sheet.
Bloomberg analysts also continue to rise on gold. Bloomberg Intelligence senior commodity strategist Mike McGlone said in his October commodity report that he thinks gold will peak soon. “It’s only been a year since gold’s last peak, and we believe it’s relatively time to revisit. “Gold has outperformed most major commodities over the past 20 years,” he said.
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