While gold prices are fueled by rising inflation, they are also under pressure from the Fed, which may become more aggressive to rein in inflation. Since the US CPI data, which will be announced on Thursday this week, is important for the steps to be taken by the Fed, gold investors focused on these data. On the other hand, there are those who say that there is no need to be afraid of the hawkish Fed. With a shaky economy and too much household wealth tied to equities, markets should fear less than a hawkish Fed, says Ronald-Peter Stoeferle, head of fund management and research at Incrementum AG. Ronald-Peter Stoeferle’s assessments and forecasts for gold cryptocoin.com compiled for our readers.
Ronald-Peter Stoeferle: Market expects too much hawkish from Fed
The highest inflation figures of the last 40 years were reached in the USA, causing Fed Chairman Jerome Powell to abandon his ‘temporary inflation’ discourse. The CPI figures, which will be announced on Thursday, are expected to be at a level to cause concern. For this reason, it is priced in the markets that the Fed may raise interest rates 4 or 5 times this year. That said, Ronald-Peter Stoeferle said on Tuesday that the Federal Reserve’s attempt to curb inflation could be a rate hike rather than a few rate hikes that some expect:
Inflation numbers are falling. That’s why we can actually take a little more time with our interest rate hike campaign. I can’t stress this enough: I think the market expects a lot of hawkishness from the Federal Reserve. This is ridiculous! It will be the shortest and shallowest rate hike cycle in the Fed’s history.
“Gold prices may rise with the currently priced interest rate hikes”
Ronald-Peter Stoeferle seems optimistic about gold, partially changing sentiments, and comments:
Everyone hates gold. 2019 and 2020 have been huge years for precious metal, and emotions have softened. With the interest rate hikes already priced in, gold may start to rise. We see a lot of pessimism when it comes to gold, I’d say the highest bear, and it’s a pretty good setup.
Ronald-Peter Stoeferle also forecasts oil to be as high as $110 a barrel, partly due to geopolitical risk and capital spending cycles.
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