Gold is nearing its worst year since 2015 on Friday as the global economic recovery eases safe-haven flows into the precious metal and central banks prepare to raise interest rates to contain inflation. We are on the last day of the year. cryptocoin.com We have compiled analysts’ gold expectations for our readers.
Jeffery Halley: Hedging pushed gold up overnight
Spot gold rose 0.34% in weak trades at the time of writing to $1,819.84 an ounce and is near a one-month high. U.S. gold futures were trading at $1,820.3, up 0.34%. Jeffery Halley, senior market analyst at OANDA, comments on the markets:
Year-end hedging pushed gold higher overnight and gold remains supportive in Asia, despite a modest US dollar rally overnight. Gold is currently located just below the resistance at $1,820.
By the way, let’s be reminded that a stronger dollar (DXY) makes bullion more expensive for buyers of other currencies.
“Gold rose reasonably well”
Gold prices have fallen more than 4% so far this year after rising 48% from the previous two years as the global economic recovery dampened demand for the safe-haven metal. After its best annual performance last year, the yellow metal has traded between $1,676 and $1,959 this year. Dominic Schnider, head of commodities and APAC forex at UBS Wealth Management in Hong Kong, is not so pessimistic about gold’s performance:
Given all the pro-growth developments and all the normalization in monetary policy, gold has risen reasonably well.
“You could argue that without inflation, gold prices would have been much lower anyway,” said Dominic Schnider, adding that gold’s performance for the year has been quite positive for Euro or Yen investors.
The precious metal is comfortable on either side of $1,800, according to Phillip Streible
“We’re in an extremely low-volume holiday trade,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago, who thinks gold is comfortable on either side of $1,800. The strategist adds that gold prices may find more direction as volumes recover next week.
Benchmark 10-year US Treasury yields fell from a one-month high without significant catalysts to steer market direction and many traders ahead of the New Year holidays. This reduced the opportunity cost of holding non-interest-paying bullion. DailyFX currency strategist Ilya Spivak says the back-and-forth volatility seen over the past two days is more about the market being too weak than any fundamental catalyst, which means increased volatility.
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