This year has been tough for precious metals investors. cryptocoin.com As we covered in the news, precious metals could not normally react to bullish news and the correction that started in August 2020 intensified at the end of the second quarter. Until a few days ago, the gold price dropped by about 10%. According to market analyst Jordan Roy-Byrne, the expectation of higher real interest rates due to the Fed’s tapering program and future rate hike may keep precious metals under pressure in the first quarter.
“In this case, the gold price will have the potential to approach the 2020 peak”
The latest data (23 December) shows the probability of a 58% rate hike in March and 71% in May. As the S&P 500 closes at a record high and the Dow Jones recovers strongly from its 200-day moving average, the analyst says he doubts rate hike expectations will fall. Jordan Roy-Byrne highlights these technical levels:
The key level for the gold price is $1,750 on a weekly basis. If gold breaks this level, it risks falling to the 40th monthly moving average at $1,630. Alternatively, if gold can trade as high as $1,900, it could invalidate the bearish scenario.
Metals and miners rallied after hitting another oversold peak in recent weeks. Analyst sees this oversold bounce as likely to continue until January, but states that a good part of the pre-interest decline occurred in the weeks before the actual rate hike.
On the other hand, he reminds that gold has a recovery record after the first interest rate hike in a new cycle. In the last four Fed rate hike cycles, the price of gold has recovered by an average of 28%. In addition, these rebounds have often reached or very close to 2-year highs. The analyst summarizes his assessment as follows:
If precious metals falls before the real interest rate hike, it creates a very bullish outlook for the 2022 balance. In this case, gold will have the potential to approach its 2020 peak.
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, asset or service 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.