Gold price is the most hot topic of recent days. A safe haven for investors. Everyone is wondering where to go. Because there is an atmosphere of uncertainty. It seems that the positive mood for the yellow metal will continue until the uncertainty is removed. So what will happen in the midst of the debt ceiling crisis? Let’s take a look at our article.
economic difficulties
Bloomberg Intelligence is giving warnings in its June metal outlook. Accordingly, he states that the Fed’s continued increase in interest rates in the face of falling commodity prices will indicate a serious economic reset. Mike McGlone, senior macro strategist at Bloomberg Intelligence, highlighted the following for gold and the economy in his June outlook:
“Despite the collapse in commodities, producer prices and bank deposits, the continued focus of the Federal Reserve and most central banks on tightening could herald a serious economic reset. Our baseline scenario for a serious economic reset is gaining strength as Chinese data disappoints and liquidity points to shrinking on most metrics.”
On the other hand, McGlone points out that the gold price is a vital asset to monitor these developments. Accordingly, recent sales below $2,000 per ounce are not the end of the uptrend, he said. cryptocoin.com When we look at it, his comment is as follows:
“Gold parallels 2008-2009 just before breaking the $1,000-per-ounce resistance at the end of May. Therefore, gold is currently limited to $2,000. All in all, the gold price looks like a caged bull waiting for a catalyst. In this context, the Fed’s center is the biggest candidate.”
McGlone wrote that the Producer Price Index hasn’t dropped this fast since 1948.
“Metrics like the falling money supply and commercial bank deposits look like a tree in the woods. Gold is the best-performing major year-over-year in the Bloomberg Commodity Index until May 25. It might make sense for this to continue in this environment. It is a matter of time.”
In the last two weeks, market expectations are that the interest rate will increase at the monetary policy meeting on 13-14 June. According to the CME FedWatch Tool, the market sees a 65% chance of a 25bps rate hike next month. Federal funds futures are starting to point to lower rates, according to McGlone. So far, gold will not rise until it sees the $2,000 level as support. Another sign that the Fed is about to change direction will be weakness in the stock market. Until that happens, gold will face stiff competition from equities and other assets, including Bitcoin.
Expectations in gold price
Sentiment among US consumers remains resilient. Therefore, the ounce price for gold is at the level of $ 1,956. The American consumer confidence index fell to 102.3 in May. Accordingly, it fell from the upwardly revised value of 103.70 in April. The data came in better than expected. According to consensus estimates, economists had expected sentiment to drop to 99.1. The report shows that while US consumers are optimistic, their expectations remain rather pessimistic.
The gold market is not overreacting to the latest economic data. Gold futures for June delivery were up 0.52% on the day at $1,954.40 an ounce. Looking at the details of the report, the Current Situation Index fell to 148.6 from 151.80 last month. At the same time, the Expectations Index fell to 71.5 from 71.7 the previous level. “The Prospects Index has remained below 80 every month since February 2022, except for a brief rise in December 2022. This level is also the level associated with a recession in the next year.” it was said. Ataman Özyıldırım, Senior Director of Economy of The Conference Board, said that the outlook for the labor market has started to deteriorate. Accordingly, their emphasis was as follows:
“The most important break in the evaluations regarding the current employment conditions was seen when the rate of consumers who reported that jobs were ‘abundant’, which was 47.5 percent in April, decreased by 4 points to 43.5 percent in May. Consumers have also become more pessimistic about future business conditions. Accordingly, this had a negative impact on the expectation index. However, job and income prospects remained relatively stable over the next six months.”
Özyıldırım said that although inflation expectations remained high, they started to stabilize.
“In May, consumers expected inflation to average 6.1 percent over the next 12 months. However, this rate remained unchanged compared to 6.2 percent in April. On the other hand, it declined significantly from the 7.9 percent peak reached last year. However, consumers continued to view inflation as a significant influence on their outlook on the US economy.”
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.