cryptocoin.com As you can follow in the news, the gold price decreased on Friday as the US Treasury bond yields recovered with the increasing risk appetite. However, the low dollar helped to cover the losses of gold. However, investors continue to weigh in on the revival outlook after a hot inflation pressure.
According to Marcus Garvey there will be a very limited tightening cycle
Spot gold was down 1.52% at $1,767.63 on Friday, while U.S. gold futures fell 1.6% to $1,768.20. Meanwhile, both European stocks and US futures rose after strong corporate gains. U.S. bond yields rose after three consecutive days of declines, causing interest-free gold to drop at its 50-day moving average. Still, gold bullion is approaching its best weekly performance since August, after gaining support from the latest US inflation report.
The consumer price index showed continued high inflation in the world’s largest economy, causing 10-year Treasury yields to drop earlier in the week as traders weighed how the Federal Reserve would react. Marcus Garvey, head of metal strategy at Macquarie Group, comments in a Bloomberg interview:
As a snapshot of this, the market priced in fears of rising stagflation. This inflation will now bring tightening. But the economy will not be able to handle it and so there will be a very limited tightening cycle.
“The gold investment market is still experiencing the remnants of last year“
Bank of America CEO Brian Moynihan predicts inflation will remain flat, while he joins finance industry leaders, including Morgan Stanley CEO James Gorman and Goldman Sachs Group COO John Waldron. Meanwhile, some Federal Reserve officials are now beginning to consider it less likely that price pressures are temporary.
This sentiment has led traders in the US short-term interest market to bet that the Fed will raise interest rates faster and more aggressively from the end of next year. Whether the central bank takes action to curb inflation at the expense of jobs will be crucial to gold’s performance over the next year, according to a Bloomberg report. Investors remain cautious for now. ETFs are poised to cut gold holdings for the fourth week, according to preliminary data from Bloomberg. Adrian Ash, director of research at BullionVault brokerage firm, comments:
The gold investment market is still experiencing remnants of the past year. It would always be a difficult act to follow.
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