The Fed’s interest rate decision was announced yesterday. Now everyone is looking at what the implications will be for gold prices. We look at what economists say. At work cryptocoin.com The freshest gold prospects we look at.
Expectations for gold prices
ANZ Bank economists have announced their expectations for Gold prices. According to analysts, the probability of a pause in the Fed’s rate hike in the next meeting has increased. But strong economic activity suggests the Fed will remain hawkish in the short term. This means consolidated for Gold prices. However, the Fed will eventually offer structural support in the medium to long term. Accordingly, it will end the increase cycle in the second half of 2023. In addition, the possibility of the dollar to continue its downtrend will be another support.
ANZ Bank economists believe the recent drop in gold prices will encourage new purchases. They also emphasize that this is likely to be supported by weak speculative positioning. ANZ Bank economists’ expectation for gold prices at the end of the year is $2,100.
Are the inflation data correct?
Expectations for gold prices are positive. On the other hand, according to Michael Wilkerson, CEO and Founder of Stormwall Advisors and author of Why America Matters, the government “gassers” the American public about inflation: Michael Wilkerson, author of The Case for a New Exceptionalism claims that it does not “accurately” reflect inflation. “Inflation hovers between two and three times what the CPI data show in key categories such as food, electricity, higher education and medical care,” Wilkerson explains. Wilkerson has over two decades of experience in finance and consulting. He uses data from non-governmental sources such as the Brookings Institution and PricewaterhouseCoopers (PwC) to support his thesis. For example, official CPI data show that healthcare costs have increased by 2.6 percent per year over the past decade. On the other hand, PwC claims it has increased 7.6 percent per year since 2006.
Wilkerson’s comments came after the latest CPI announcement, which reported annual inflation of 4.9 percent in April to hit 4 percent in May 2023, well below the last peak of 9.1 percent in June 2022. Wilkerson estimates that inflation, as measured by CPI, could reach 12 percent by the end of 2023. He also emphasizes that this is due to both monetary and supply-side phenomena. On the other hand, it is among the claims that it will be caused by shocks in oil prices. This, of course, allows him to comment on gold prices.
Oil production and gold
Saudi Arabia plans to reduce oil production by 1 million barrels per day. Other members of the Organization of Petroleum Exporting Countries (OPEC), which accounts for 40 percent of global crude oil production, also announced that they plan to cut production until 2024. Wilkerson said this, combined with the growing influence of the BRICS alliance (Brazil, Russia, India, China and South Africa), could put upward pressure on oil prices. Wilkerson states that the BRICS alliance is not in the mood to be friendly. He also adds that they will make decisions that are in their own interest, not ours. So what does this mean for gold prices?
The BRICS negotiated more bilateral trade deals after the dollar was used as a weapon following Russia’s war with Ukraine. Pakistan, which has recently expressed interest in joining the BRICS, made the move. Accordingly, he bought oil from Russia at a discount, paid in Chinese yuan. The US economy is facing a potential recession as well as further inflation. Accordingly, there is a greater likelihood of bankruptcy. Regarding this, Wilkerson claimed that “the stars align for gold.” Wilkerson expects strong long-term performance for gold prices. Wilkerson said, “If you stick to my hypothesis… we’re going to see some movement in energy and some movement in inflation starting in the Autumn. So yes, I think there is a reasonable scenario where we could see gold above $2,000 by the end of the year.” uses the phrase.
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