Gold stages a solid recovery from its lowest level since April 2020. Nonetheless, the upside potential for the yellow metal seems limited amid the prospects for a more aggressive policy tightening Federal Reserve, strategists at TD Securities report.

Risk of capitulation growing for gold

“Gold is seeing some relief as the UK's plan to buy long-end Gilts sees yields weaken, while the elevated rates volatility of late has also seen Fed pricing reduced to a terminal rate of 4.47% vs 4.7% just days ago. Nonetheless, we still see the risk of capitulation growing for the yellow metal.”

“Rates markets are pricing the potential for higher interest rates to persist for some time, and a steady stream of Fedspeak is likely to hammer this point home. In this sense, our analysis suggests gold prices could still have further to fall in the next stage of the hiking cycle. Indeed, the increase in inflation's persistence suggests that a restrictive regime may last longer than historical precedents, which argues for a more pronounced weakness.”

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD hovers around 0.6730 reverting its negative trend

AUD/USD hovers around 0.6730 reverting its negative trend

The AUD/USD pair bounced from a weekly low of 0.6668 and trades comfortably above the 0.6700 mark. Risk aversion did little to help the greenback as the focus remains on global economic growth and the looming Fed’s decision.

AUD/USD News

EUR/USD holds above 1.0500, lacks follow-through

EUR/USD holds above 1.0500, lacks follow-through

A risk-averse environment limited EUR/USD gains, but demand for the USD remains scarce. Buyers defending the 1.0500 area, hinting at potential higher highs in the near term.

EUR/USD News

Gold carves out a bullish scenario into key resistance

Gold carves out a bullish scenario into key resistance

Gold price is higher on the day having climbed from a low of $1,768.82 and reaching a high of $1,789.05 so far as the US Dollar tails off in the mid-afternoon session in the US.

Gold News

Ethereum price subject to volatility as Chainlink enables staking on the ETH network

Ethereum price subject to volatility as Chainlink enables staking on the ETH network

Ethereum price has investors dialing in as Network advancements are arousing speculation. Still, the technicals will need to show forth stronger signals to justify opening a long position.

Read more

What happens after the Fed reaches the terminal rate

What happens after the Fed reaches the terminal rate

The discrepancy starts to show. What will the Fed do? For now, the Fed is raising rates to stave off inflation, and are expected to level out at around 5.0%. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures