“New Wave Effect” 5 Analysts Announced Their Gold Price Forecasts!

The US CPI, announced on Friday, rose slightly above expectations. But some bets on the Fed’s aggressive rate hike have cooled, as the jump in inflation wasn’t as big as expected. These, in turn, increased the safe-haven appeal of the yellow metal and the gold price closed higher on Friday. Analysts’ gold forecasts and assessments cryptocoin.com compiled for our readers.

Edward Moya: Gold price to embrace today’s report

Spot gold rose 0.47% to $1,782.45 after falling over the past two sessions. U.S. gold futures were up 0.46% at $1,784.80. Edward Moya, senior market analyst at OANDA brokerage firm, comments:

The latest inflation report hasn’t been as hot as some had expected, and it will keep the Federal Reserve’s rate hike expectations between two or three hikes in 2022. Gold price will embrace today’s report as the Fed is likely to push its first rate hike mid next year.

While gold is seen as an inflation hedge, reduced stimulus and interest rate increases tend to raise government bond yields, raising the opportunity cost of non-interest bearing bullion. David Meger, director of metals trading at High Ridge Futures, comments:

The potential for an increase in interest rates is dragging right behind the gold market. But the underlying theme will be supportive inflationary pressures.

The focus will now be on the Fed’s policy meeting on December 14-15. Vincent Tie, director of sales at the Silver Bullion dealership in Singapore, says gold is in demand from “investors who keep their assets focused on average value, with dollar costs and prices below $1,800.”

According to Jeff Klearman, current low real interest rates will continue to support the gold price.

According to Jeff Klearman, Portfolio Manager at Graniteshares and presenter of the Graniteshares Gold Trust, precious metals prices are supported by “persistently, historically low real interest rates, along with Inflation and Omicron concerns,” but a strong U.S. dollar and the Federal Reserve’s monetary policy. It is constrained by concerns that it will tighten its policy more aggressively. Portfolio Manager explains it this way:

Ten-year US real interest rates have remained at or near historically low (and negative) levels. The current low real interest rate reflects a lot of uncertainty about the course of the FED’s future monetary policy and will continue to support gold prices until it raises it to higher levels and sustains it for a while.

Data released on Friday revealed that the US cost of living climbed in November, pushing the inflation rate to about 6.8%. The consumer price index rose 0.8% last month, more than the 0.7% increase expected by economists surveyed by The Wall Street Journal. According to Jeff Klearman, the much higher-than-expected CPI data not only raises inflation concerns, but also adds to concerns that the Fed may be lagging behind in its fight against inflation:

A very aggressive Fed in the fight against inflation can also affect economic growth leading to falling stock (and other asset) prices, which in turn could provide support for gold prices.

“High CPI may push the Fed to act aggressively”

Jason Teed, associate portfolio manager of the Gold Bullion Strategy Fund QGLDX, says the higher-than-expected inflation rate will encourage the Fed to speed up reducing bond purchases in a bid to slow inflation:

Higher rates typically translate into downward pressure on the gold price. However, markets may be predicting inflation to be warmer than the Fed would like to go forward, leading to upward movement below it.

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