Gold prices continue their volatile course. The ounce gold price, which fell with the strengthening of the dollar after the strong US employment data last week, could not find what it was looking for from the support point with the possibility of the Fed stopping the rate hikes in June.
Spot gold fell as low as $1,939.44 an ounce and is close to its lowest level since May 30. U.S. gold futures fell to $1,956.40 an ounce.
“Once again, the hot headline non-farm payrolls data triggered a recovery in the dollar, lowering the resistance of the gold bulls,” said Han Tan, chief market analyst at Exinity.
The dollar index rose 0.3% on Monday, making dollar-denominated gold more expensive to foreign buyers. Meanwhile, US bond yields were close to one-week highs.
According to SP Angel analysts, gold has also weakened due to the weakening in safe-haven demand, i.e. increased risk appetite for riskier instruments. This situation was further reinforced when US President Joe Biden passed the debt ceiling agreement through the House of Representatives and the Senate.
However, as a factor that provides a base for gold prices, the probability of the Fed holding steady on interest rates at its June 13-14 meeting was estimated at 77 percent, according to the CME FedWatch Tool.
To sum up, non-interest bearing gold becomes less attractive in a high interest rate environment.
“We need to see the Fed take a more dovish stance to see higher gold prices, which will likely be due to weaker economic data,” says UBS analyst Giovanni Staunovo.
While investors focus on the rise in global stocks by betting that the interest rate hike will stop, UBS’s strategy report underlines a very serious trading margin that may occur in a short time. Accordingly, a 20 percent trading opportunity may occur under an ounce within 1.5 years.
A technical pullback to $1870 an ounce is possible in the short term, keeping our target at $2250 for mid-2024.
UBS
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. 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, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
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.