Gold Price Forecast: XAU/USD to slide further if Fed hikes more than 75 bps – Commerzbank
|Gold is trading well below the $1,700 mark. For the Fed’s meeting next week, an increase of 75 basis points is already fully priced in. Strategists at Commerzbank analyze how the yellow metal could react to such a move.
Recovery potential in the medium-term
“If the Fed raises its interest rates by more than 75 bps, the gold price risks sliding further. However, this will depend not only on how quickly the Fed hikes its rates in the short-term but on how probable it is that it will stick with high interest rates.”
“If the market is prompted by the meeting to price in higher rates in the short-term but anticipates stronger rate cuts due to recession fears next year, the gold price is likely to suffer less.”
“We still envisage recovery potential in the medium-term because we expect that the Fed will lower its interest rates slightly again next year in response to a contracting economy.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.