cryptocoin.com As you can follow in the news, gold prices, supported by the slightly weakening dollar, rose on Thursday ahead of the year-end holidays. However, it was likely limited by strong Treasury yields and strong demand for global equities. According to market analyst James Hyerczyk, the price action shows that the big investors were fueled by year-end portfolio rebalancing rather than bullish positions.
How is the short and long term trend for gold?
Strong US economic data may have contributed to the price increase as traders reacted to stronger-than-expected inflation data for November, even as the Fed promised at least three rate hikes and faster tapering in just over a week in 2022. pulling. The analyst makes the following assessment:
Gold buyers who bet that a weaker economic recovery will mean slower Fed rate hikes in 2022 may be right. However, if there was any doubt, interest rates would likely have fallen flat.
Buyers benefiting from the weaker dollar due to the safe-haven long liquidation are likely on the right track, according to the analyst. “The thing is, investors are being forced to react to Omicron because the fundamentals are mixed right now,” said the analyst, noting that they had a simple plan before Omicron, explaining as follows:
Faster tapering leads to faster rate hikes. Rising rates help increase the dollar’s investment attractiveness, and a stronger dollar tends to suppress demand for dollar-denominated gold.
However, the analyst says that the Omicron boom encouraged investors to move into the dollar as well, but that was a week ago. According to the analyst, conditions have changed and now investors are waiting for Omicron to be temporary. The analyst states that this essentially means that the impact on the economy will probably not be enough to slow down the Fed’s tapering plans or interest rate hike expectations, and makes the following assessment:
In the long term, a bearish trend appears for gold. But in the short term, we may continue to see countertrend moves below until the “Big Boys” returns after the holidays.
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