Gold prices climbed above the critical resistance at $1,850, closing the week at a three-month high. cryptocoin.com As we reported, the precious metal started to rise after the White House recommended that all US citizens leave Ukraine within the next 48 hours. On the other hand, due to rising inflation, there are interest rate hikes and tightening on the Fed’s agenda. Commenting on the developments in the global markets, Strategist Hamza Yardimcioglu claims that the steps to be taken by the Fed will be insufficient and gold will rise step by step.
“Gold broke the triangle, from now on it will rise step by step!”
Although gold is bought as a geopolitical safe haven, when tensions begin to subside, gold is the first thing to be sold. Geopolitical tensions have fueled the fire, but the truth is that market volatility isn’t going away anytime soon. Even before the latest Ukrainian news broke, volatility was creating instability in the stock markets, helping the gold market fight rising bond yields.
Gold is attractive because there is so much fear in the market. Aside from geopolitical headlines, the biggest fear among investors is how the Federal Reserve and other central banks will deal with mounting inflation pressures. This week, US consumer prices rose 7.5% year-on-year in January, with inflation reaching its highest level in 40 years. Investors are not only frightened by the threat of rising inflation, but are starting to get nervous about how the Fed will deal with the increasing price pressures. Markets are definitely seeing a 50bp move in March, pricing in the potential for six rate hikes.
Commenting on the developments in the global markets, Strategist Hamza Yardimcioglu emphasizes that as the Federal Reserve has reached its historical peak, it will have to increase interest rates against inflation, but this will not be enough. The strategist reminds that the USA made a mind-blowing monetary expansion during the Covid pandemic and there are currently close to 9 trillion dollars in the world. From this point of view, Hamza Yanıoğlu states that the world will face hyperinflation.
Strategist Hamza Yardimoglu, who thinks that rising inflation is a harbinger of hyperinflation, says that inflation has risen not only in the USA but also globally, and that stocks and other investment instruments have lost their value. According to the strategist, as the current situation is like this, investors tend to buy gold in order to avoid depreciation. The strategist notes that technically gold has broken the triangle and started to rise step by step, and predicts that the yellow metal will rise more from next week.
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