The levels to watch for gold are gaining importance. So what are the expectations for gold towards the end of the year? Let’s take a look at analysts’ comments and developments.
Interest rate hikes
The gold market has witnessed simultaneous hawk moves by central banks around the world. It declined after Fed Chairman Jerome Powell’s commitment to two more rate hikes this year. In his testimony before Congress, Powell reiterated his commitment to two more rate hikes this year.
This stance was echoed by other central banks, including the Bank of England, which raised the interest rate to 5%, the biggest increase since 2008. The Norwegian Central Bank has also increased interest rates, signaling that more increases will be made in the near future. The Swiss Central Bank and the Turkish Central Bank also increased interest rates.
Weakening gold price and safe-haven shift
The collective actions of central banks and the revision of the global growth outlook yielded results. It made the US dollar a more attractive safe-haven asset compared to gold. Market analysts state that investors took refuge in the dollar due to the tightening monetary policies. At this point, they warn that the gold market may experience downward pressure. After Powell’s statement, there is now the gold price, which fell to the lowest level in three months. It also reflects concerns about inflation and a tight labor market.
With Powell maintaining his hawkish stance, the probability of a rate cut in 2023 dwindled. Focusing on US unemployment claims rather than inflation data will shape the future course of gold. Investors are watching the Fed’s decision-making and its impact on further rate hikes, which will play a key role in gold’s performance.
Market expectations
As a result of the hawkish messages from the Federal Reserve, financial institutions changed their forecasts. For example, Commerzbank lowered its year-end gold forecast. Another rate hike awaits. It also foresees a rate cut in the second quarter of the next year. However, some analysts, such as Chief Macro Strategist David Hunter, point out that there will be a potential rally in gold and silver after the collapse. They estimate that gold could reach all-time highs by October. On the other hand, it predicts that it can see significant increases until 2030.
According to David Hunter, gold will reach $3,000 by October as the markets ‘melt down’. On the other hand, S&P is expected to rise at least 36 percent. Predicting the last stock market dip in 2020 correctly, Hunter claims that the markets are nearing the end of the 41-year secular bull cycle that started in 1982. As a result, investors should follow the Fed’s decisions closely. It should also focus on U.S. unemployment claims and be familiar with financial institutions’ revised estimates. Short-term challenges remain. However cryptocoin.com On the face of it, some experts are predicting a potential rally that offers long-term upside opportunities after the gold and silver collapse.
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