The price of gold recouped some losses on Friday after slumping nearly 3 percent in the last session, but the strong dollar continued to slide for a second week with focus on next week’s Federal Reserve meeting. Meanwhile, analysts shared their comments. cryptocoin.com We have compiled the comments of some analysts…
StoneX analyst: Investors watch Fed for gold price
Bullion fell nearly 3 percent on Thursday after an unexpected increase in US retail sales boosted expectations that the Fed could reduce stimulus sooner, which prompted a rally in the dollar. The dollar held close to a three-week high, raising the cost of gold for buyers of other currencies, and gold bullion was down 1.6 percent this week.
“Everyone is watching the Fed,” said StoneX analyst Rhona O’Connell. “Although the discussion of reducing bond buying is still ongoing, it would be very tempting after a $40 drop in the price of gold (looking for an entry point).” “Investors will investigate Fed Chairman Jay Powell’s press conference,” O’Connell said, adding that the prospect of the Federal Reserve tightening monetary policy will not stop the possibility of a downside reaction. The Fed’s policy-making committee will meet on Tuesday and Wednesday.
Exinity analyst: US monetary policy could lead to a drop in gold
“Gold fans are trying to clean themselves up,” said Han Tan, chief market analyst at Exinity. Tan added that if US monetary policy normalization converges, it will put more downward pressure on prices.
The relaxation of economic support measures will not only tarnish gold’s safe-haven status, but any subsequent rise in interest rates will translate into a higher opportunity cost of holding non-yielding assets such as bullion.
ActivTrades analyst: Inverse correlation between US dollar and gold was the reason for yesterday’s losses
“Gold had a bad week and price action may be on the way for reflation trading to come back to end 2021,” said Michael Armbruster, managing partner at Altavest. “Unfortunately for gold fans, gold tends to trade lower in a reflationary economic regime because US Treasury yields tend to rise,” he added. In the meantime, Armbruster points out that there will be no announcement to reduce bond purchases at the Federal Reserve’s meeting next week.
“Yesterday’s losses came as a result of an inverse correlation between the precious metal and the US dollar, as the upside surprise currency received unexpected support following the release of US retail sales while consensus was on a contraction,” Ricardo Evangelista, senior analyst at ActivTrades, said in a daily report. ” said.
Evangelista said that in the long run, evidence of economic recovery in the US “helps the situation for those who advocate earlier reductions in bond buying and therefore supports the US dollar, a scenario that could lead to further weakening of gold.”
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