Despite gains from last week, gold started the new trading week with a 1% drop on the day. After that, economists at Capital Economics shared forecasts for the future of gold. These forecasts predict further losses in the future. That’s because economists are betting that the strength of the dollar and rising treasury yields will weigh down the precious metal.
“Golden December at these levels”
The Capital Economics team has released the latest commodity update. Accordingly, he said that gold closed the year at $1,650 per ounce. This means that the precious metal could drop around $150 from its current prices. At the time of this writing, December Comex gold futures are trading at $1,796, down $19 on the day. Economist forecasts came in this way despite gains of 1.5% last week following a slowdown in inflation. CPI figures were published below expectations last week. Accordingly, annual inflation fell to 8.5% after the 9.1% pressure in June. Despite the rapid rise, many analysts were disappointed that gold did not take advantage of the sudden bullish move.
The economist team said in a report Friday that inflation news was initially positive for the gold field. According to the team, this was because the Fed stopped market expectations of another aggressive move at its September meeting. According to economists at Capital Economics, the new CPI data will change the Fed’s rate hike in September. The team expects a 0.50 bps rate hike instead of the 0.75 bps the markets are betting on. However, the $1,650 price expectation for December is based on the US treasury. Economists predict that treasury yields will increase by the end of the year. The team said:
“After the lower-than-expected inflation data, investors’ expectations for rate hikes in the US are lowering. Therefore, most commodities were up. However, we still expect a small increase in the US 10-year Treasury yield by the end of the year. This has the potential to put downward pressure on commodity and gold prices again in the coming months. As a result, our year-end estimate is $1,650 per ounce.”
“The dollar continues to gain strength”
Capital Economics has a strong dollar outlook, balancing the benefits of additional safe-haven flows triggered by the war in Ukraine. Economists have predicted a decline in gold prices since March. They also say they recently revised their forecasts. They expect the 10-year Treasury yield to rise to about 3% by the end of 2022 and to 2.75% by the end of 2023. As a result, they expect greater real returns. Meanwhile, they argue that the US economy will hold up better than other advanced economies in Europe and Asia. They think that the interest rate differential will continue to support the dollar. So, they predict that the US dollar will appreciate a little in the future. In addition, cryptocoin.com As we have reported, short-term price forecasts for gold are generally in a downward trend.
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. Therefore, 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.
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.