Gold Price Forecast: No reason for any significant downward correction of XAU/USD – Commerzbank

FXStreet Insights Team FXStreet

Gold price dipped below the $2,020 mark again for a time at the end of last week. Strategists at Commerzbank analyze the yellow metal’s outlook.

Temporary setback on the Gold market

New York Fed President John Williams put a considerable dampener on rate cut speculations. According to Williams, it is too early to think about easing monetary policy at the current time. He even signalled explicitly that a rate cut as early as March appears unlikely. His Chicago Fed colleague Austan Goolsbee also warned that there could not yet be any talk of the US having beaten inflation and likewise took the wind out of the sails of any rate cut speculation.

All in all, however, it is presumably still just a question of time before the US Federal Reserve lowers its interest rates, so we see no reason for any significant downward correction of the Gold price in the foreseeable future.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD holds range below 1.3650 amid Iran risks

GBP/USD extends its sideways consolidative price move for the second straight day and trades below 1.3650 in Tuesday's European session. The US Dollar is looking to build on its modest recovery amid US sanctions on Iran, acting as a headwind for the pair. The lack of follow-through selling warrants some caution for bearish traders.

EUR/USD struggles near 1.1650 as USD recovers amid Mideast woes

EUR/USD is struggling to gain traction, while trading near 1.1650 in European trading on Tuesday. The pair fails to find support amid a modest US Dollar recovery as rising oil prices, elevated bond yields, and escalating Middle East tensions fuel risk-off trades. Upbeat Germany IFO Survey fails to inspire Euro bulls.

Gold remains depressed below $4,650 on firmer USD, Fed risks, and Middle East tensions

Gold remains on the back foot below $4,650 through the first half of the European session. However, the lack of follow-through selling warrants caution before positioning for an extension of the intraday retracement slide from the $4,700 neighborhood, or the highest level since May 14, touched earlier this Tuesday. The US Dollar is seen building on its recovery from a three-month low as inflation risks stemming from volatile energy prices keep bets for at least one interest rate hike by the US Federal Reserve on the table.

Bitcoin tops $80,000 as US Treasury fights high yields – AERO, VIRTUAL rally

Bitcoin extends gains above $80,000 as broader market risk-on sentiment persists. The scarce asset could extend its rally as the US Treasury combats high yields in the long-dated bond market, with further interventions on the horizon. Aerodrome Finance (AERO) and Virtuals Protocol (VIRTUAL) emerged as top performers over the last 24 hours.

The forex market is switching to a ‘debasement trade’

The US dollar has stabilised near three-month lows thanks to a rapid recovery in Treasury bond yields. Yields on 30-year bonds are returning to the levels seen following the Treasury’s announcement that it was increasing the minimum purchase volume to $4 billion. The greenback got support from falling stock indices, the continued rally in Brent crude, and positive signals from the US economy.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.