The price of gold fell on Thursday as US dollar and Treasury yields recovered after US Federal Reserve officials signaled further rate hikes, despite signs of slowing inflation in the world’s largest economy. So, what are the experts waiting for now? Here are the details…
These bottoms are next for gold price
Spot gold fell 0.3 percent to $1,786.17 an ounce at the time of writing, after hitting $1,807.79, its highest since July 5, on Wednesday. U.S. gold futures fell 0.6 percent to $1,802.10. Edward Meir, an analyst at ED&F Man Capital Markets, used the following statements:
The dollar sold very hard after the US inflation figures and yields fell as well, but at the end of the day, bond yields have risen again and the dollar is now a little stronger, hurting gold. Also, Fed officials said they still need to increase the bearish rates for gold. In the short term, we may see a pullback towards $1,780 in gold prices.
US dollar index gains slight momentum
The dollar was up 0.2 percent at 105,420 after falling to 104,630 on Wednesday, the lowest level since June 29. So, it gained some groundwork. The benchmark US 10-year Treasury yields also rose to 2.7910 percent. The data showed that US consumer prices did not rise in July due to the sharp drop in gasoline prices, raising hopes that the Fed will be less aggressive in its tightening plans going forward. However, Fed policy makers have indicated that they will continue to tighten monetary policy until price pressures are completely broken.
cryptocoin.com As we have also reported, gold is highly sensitive to rising US interest rates as it increases the opportunity cost of holding non-yielding bullion. On the technical front, spot gold could test the $1,767-1,773 per ounce support zone, below which a break below it could lead to $1,756, according to Reuters technical analyst Wang Tao.
Legendary analyst Jim Wycoff: Gold reacted instantly
The data showed that US consumer prices did not rise in July due to the drop in gasoline prices. This is the first significant pause in inflation to climb in the last two years. Jim Wyckoff, a senior analyst, used the following statements:
Gold initially reacted abruptly after better inflation data as investors expected a less aggressive Fed. However, they later realized that the data was not stagnant.
The metal, which has tended to perform well in a low-interest environment, came under pressure as Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans reaffirmed an aggressive path for rate hikes. Kashkari said the US central bank should raise the policy rate to 3.9 percent by the end of the year and to 4.4 percent by the end of 2023 to reduce inflation. Meanwhile, Goldman Sachs lowered its price forecasts for the metal and said that “structurally, gold is likely to remain range-bound as growth and tightening factors continue to balance each other.”
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