Gold price declined on Friday, closing the week at $1,920. The precious metal posted its sharpest weekly decline since November, after the Federal Reserve this week decided to raise benchmark interest rates for the first time since 2018.
“Gold price declines after dollar rally”
cryptocoin.com As we mentioned in the news, the precious metal closed the last week with a serious decline due to the increase in policy interest rates by the US and UK central banks and the increased hopes for peace in Ukraine. During the week, the Fed increased benchmark interest rates by a quarter point, between 0.25% and 0.5%, in line with expectations, giving signs for continued increases.
Edward Moya, senior market analyst at OANDA, says gold prices fell after a rally in the dollar as investors continue to digest the Federal Reserve’s ‘new hawk stance’.
Against this backdrop, the ICE US Dollar Index (DXY) was up 0.26% on Friday, but was down nearly 1% for the week. Movements in the dollar may affect gold because the precious metal is traded against the dollar.
“There may be a volatile, short-term path to the gold price at $1,900”
In a market update, Edward Moya says the dollar will benefit from rapidly expanding interest rate differentials and stable safe-haven flows, as investors worry about the impact of the war in Ukraine on inflation and ultimately growth. The analyst evaluates the impact of these developments on the gold price as follows:
Meanwhile, gold could have a volatile short-term path at $1,900 providing key support. On the upside, gold price might find temporary resistance at the $1,950 level.
Carlo Alberto De Casa: There is a huge appetite for gold
According to Carlo Alberto De Casa, foreign market analyst at Kinesis Money, the evolution of the war between Russia and Ukraine and the next Fed decisions will be the main market drivers of the gold price.
Despite the recent drop, Carlo Alberto De Casa says many investors remain bullish on bullion. The analyst bases his views on the following data:
The appetite for nugget continues to be enormous. The precious metal conglomerate sees support at two levels: first, the $1,920 area (where gold peaked in 2011), then the $1,900 threshold.
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