Market expectations are that the Federal Reserve will end the tightening cycle after next week’s monetary policy decision. Amid these expectations, ounce gold prices tested another important resistance point. This shows that the gold market has gained a new momentum. On the gram gold front, market expert Hatice Kolçak says “there is still a long way to go”.
Gold price action created a ‘bull flag’ pattern
cryptocoin.comAs you can follow, gold prices reached the highest level of the last seven weeks. Gold futures for August delivery are trading at $1,979.90, up 1.2% on the day. According to some market analysts, this move could be the beginning of a fresh rise towards $2,000. Julia Cordova, founder of Cordovatrades.com, says that gold’s price action creates a technical bull flag pattern. She also states that a one-week close above $1,973 would be a breakout move.
Cordova adds that the next level of resistance to watch will be around $2,017 to $2,020. She notes that this level will likely be tested as early as next week.
Gold bulls take control of the market
James Stanley, market strategist at StoneX, says the gold bulls are in complete control of the market. Stanley adds that he is watching the $2,000 level closely. In this context, “It is possible that it will take another day or two. However, the momentum and the responsiveness are there,” he says.
According to analysts, gold is catching a bid as markets expect next week to be the last rate hike by the Fed in this tightening cycle. The market has almost fully priced in a 25 basis point move next Wednesday. Stanley adds that weaker-than-expected US retail sales figures contributed to market expectations on Tuesday. US retail sales rose 0.2% in June after a revised 0.5% increase in May, according to the latest data from the US Department of Commerce. Economists had expected a 0.4% increase in last month’s headline figure.
The beginning of a long-term downtrend in consumption!
Paul Ashworth, North America chief economist at Capital Economics, expects this to be the start of a prolonged downtrend in consumer consumption. He says this will put pressure on economic activity. Based on this, he makes the following statement:
We expect consumption growth to remain low in the second half of this year as excess savings are almost completely eliminated, the impact of higher interest rates and tighter loan conditions is gradually emerging, and student loan repayments are resuming.
These, It will be extremely positive for the gold price.k
Naeem Aslam, chief investment officer at Zaye Capital Markets, expects next week’s rate hike to be the Fed’s last rate hike. He says this will continue to support gold prices. He explains his views on this matter as follows:
We think there is a clear understanding among market players that the Fed will fire the last bullet next week. From then on, the conversations will only be about the ongoing pause and a possible rate cut. We believe that all this will be extremely positive for the gold price.
Expert: Gram gold price will continue to rise!
On the gold front, expectations are on the rise. The situation is not different for the gram gold price. Moreover, the sharp rise in the Dollar/TL rate provided gram gold investors with a similar return to the Dollar investors. Although this is the case since ounce of gold is horizontal, the upward movement in the ounce price, which determines the price of gram gold, and the USD/TL exchange rate, may bring about a strong increase in gram prices. Market expert Hatice Kolçak also points to this situation. In this context, he says that the reason for the increase in gram gold so far is the increase in the dollar exchange rate. However, Kolçak expects an increase on both the ounce and dollar fronts. In this direction, he shares the following predictions:
Now, my expectation in Dollar exchange rate has increased to 30-31 TL. For this reason, I revised my expectation under grams to 2.000 TL and above… Those who remained in TL ask what we will do. However, the train has departed and is now on its way! It makes sense to invest in KKM or trending things. My expectation is that gram gold and dollar will rise.
Hatice Kolçak does not take into account the price on the screens, which is 1,710 TL on the physical side. Because the gap between the Grand Bazaar rate and the Interbank rate has opened again. Therefore, Kolçak says that the real figure for gram gold is 1,882 TL. The expert said, “So this is the real figure under the physical. There is an increase in the price of gram gold. It looks like it will continue and will no longer give a buying opportunity,” he says.
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