Gold Price Forecast: XAU/USD’s upswing may not continue – Commerzbank
|Gold price exceeded the $2,000 mark again for the first time in five months and a half on Friday. Economists at Commerzbank analyze the yellow metal’s outlook.
Gold to lose momentum if the tailwind lent by buying by speculative investors abates
The increase in the Gold price is likely to lose momentum if the tailwind lent by buying by speculative investors abates. Furthermore, it is possible that the Fed might have to raise its key rate again after all, contrary to what the market currently expects.
The US economy saw third-quarter growth of nearly 5% in annualised terms – the strongest growth rate in seven quarters. At the press conference following the Fed meeting, Fed Chair Powell will probably leave the door open to another rate hike in December. What is more, it remains to be seen whether Friday’s data will indicate the cooling that is hoped for in the US labour market. If this fails to materialise yet again, a Fed rate hike in December could become more likely again.
It is true that interest rate expectations have had less of an influence on the Gold price of late, but that doesn’t necessarily mean that this will continue to apply in the coming weeks.
We would warn against assuming that the upswing in Gold that we have seen in recent weeks will simply continue, as it has been due to exceptional circumstances.
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.