Gold prices rose despite the Fed’s Christopher Waller saying interest rate cuts would be delayed. In addition, geopolitical tensions maintain gold’s safe haven status. According to analysts, gold’s trajectory depends on the Fed’s interest rate strategy in an inflation environment. In this environment, Commerzbank and ANZ economists draw attention to the strength of gold.
Commerzbank: Even the Fed’s hawkish comments cannot stop gold!
cryptokoin.comAs you follow from , gold made its investors happy with a strong move. The yellow metal is trading near the $2,200 level at the time of writing. According to economists at Commerzbank, the market is underestimating the risk that rate cuts will come later and be less significant. In this context, economists make the following assessment:
Even hawkish comments from the Federal Reserve do not seem to affect the yellow metal. Just on Wednesday, Fed President Christopher Waller emphasized that the latest economic data would require the postponement or reduction of interest rate cuts. Therefore, the market appears to be underestimating the risk of later and less significant US rate cuts. Although the median of top Fed officials’ rate forecasts remained unchanged at the last meeting, the distribution showed only a few would have to raise interest rates.
ANZ: The gold market is pricing in the expectation of falling inflation!
Meanwhile, gold has extended its recent gains on the expectation that inflation will decrease. Safe haven demand remains strong, according to ANZ Bank economists. Economists make the following statement on this issue:
The US Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, will be released on Friday while markets are closed. The rising gold price indicates that the market expects a further decline in inflation and will support central banks’ moves to cut interest rates later this year. Safe haven demand also remains strong.
Brief forecast for the gold price: Cautious rise prevails!
Market analyst James Hyerczyk evaluates the market and technical outlook of gold as follows. Given Waller’s cautious stance on rate cuts and ongoing geopolitical risks, the short-term outlook for gold remains cautiously bullish. The possibility of interest rate cuts being postponed or reduced, combined with gold’s safe-haven status amid global tensions, points to a stable or slightly upward trajectory for gold prices in the near term.
Meanwhile, gold remained in a range for most of the month. The yellow metal traded between $2,146.00 and $2,222.92 during this period. A break above this resistance level could potentially push prices towards the $2,300 level. But the downside risks are huge. In this turmoil, the 50-day moving average of $2,080.00 is an important target. This move is in line with the market’s reaction to the Fed’s expectation of three interest rate cuts in 2024.
As gold continues its upward trend on Thursday, investors expect a record high of $2,222,915 to be tested. Since there is no resistance beyond this level, it is possible for prices to continue rising. On the downside, recent price movements have moved short-term support at $2,146.155. This is a potential trigger point for an acceleration to the downside, with the 50-day moving average at $2,056.70 the primary target on the downside.
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