“The Shaking Wave Is Coming” 6 Analyst: Gold is Carving These Soles!

Gold prices rose close to 2% on Friday as the dollar weakened amid reports of a potential debate over the pace of rate hikes amid US Federal Reserve officials. Thus, after weeks of consecutive losses, the shiny metal closed the week with profit. Analysts interpret the market and share their assumptions.

“It is possible for gold to see further declines”

Spot gold traded at $1,656.21 last Friday, up 1.74%. US gold futures rose 1.2% to $1,656.3 USD. The WSJ reported that Fed officials are moving towards another rate hike of 0.75 percentage points in November at real speed. He also noted that some officials are beginning to give signals of their desire to slow the rate of increase soon. Daniel Ghali, commodity strategist at TD Securities, comments on the matter:

The Wall Street Journal article that talks about the speed of rate hikes gives a lot of insight for market participants.

Stephen Innes, managing partner of SPI Asset Management, comments:

The Fed is now halfway through the tightening cycle. There is probably more room for rates to increase. Therefore, it is possible for gold to see further declines.

“Multiple of the headwinds actually priced in”

Philadelphia Fed Leader Patrick Harker said on Thursday, adding to the latest hawkish pronouncements, the US central bank “will continue to raise interest rates for a while.” Also, data released Thursday, which bolstered expectations for another major rate hike next month, showed that the number of Americans filing for new unemployment benefits fell last week.

However, many of the headwinds are essentially priced in, says Sugandha Sachdeva, Religare Broking’s vice lead for commodity and currency research. He also notes that this situation will provide a base for gold prices around $1,580-1,620. Sachdeva mentions that the impact of rising borrowing costs on the economy is beginning to emerge. For this reason, he notes that the Fed may go a little slower in interest rate hikes after the November meeting. He adds that this should support gold.

“It is possible for gold to break to $ 1,600”

Michael Hewson, chief market analyst at CMC Markets UK, comments on the latest developments:

Gold continues to be driven by the tide in yields and the strength of the US dollar. As yields continue to rise, it is possible that the going side of gold will remain bearish. Also, it is possible to break the September lows of $1,600.

“Fed’s aggressive stance remains the main driving factor for gold”

The US Federal Reserve and other central banks continue their aggressive monetary policies that tighten. This makes the non-yielding yellow metal less attractive compared to other interest-bearing assets. Therefore, gold has lost more than 11% so far this year. Rupert Rowling, an analyst at Kinesis Money, explains:

Gold also failed to react to the chaos in Westminster, with markets seeing the end of Liz Truss’ disastrous mission respite as positive for stocks. The Fed’s aggressive stance remains the main driving factor overriding others, including the Ukraine war.

“With the decrease in the price, people started to buy gold”

Koindeks.com As you follow in , San Francisco Federal Reserve Bank Leader Mary Daly said on Friday that the central bank should avoid pushing the US economy into an “unforced downturn” by tightening too much. She also added that the Fed is approaching a point where it should slow down rate hikes.

From a physical point of view, gold demand by individual consumers in India gained momentum this week. The recession in local prices before the festivities was also effective in this. Michael Matousek, chief trader of Q. Global Investors, says that as gold falls, people start to buy gold.

“There are still more drops in the cards”

CME Group’s latest data for the gold futures markets shows that traders added just 893 contracts to their open interest positions on Thursday. Thus, it reached the third consecutive daily increase. Instead, volume reversed the two-day increase in a row and contracted to more than 16,000 deals.

Market analyst Pablo Piovano says Thursday’s inconclusive price action for gold is in the midst of a minor uptick in the open interest situation. He also notes that it implies the possibility of further losses in the very near term. However, the next target for the precious metal remains at $1,614 (September 28), 2022 low.

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