Gold Price Forecast: XAU/USD to shrugg off Fed rate hikes – Commerzbank


Gold price has fallen to $1,965 this morning due to positive signs from the talks conducted by Russian and Ukrainian representatives, which are giving rise to hopes of rapprochement. Another focus this week will be on the meeting of the US Federal Reserve’s Open Market Committee. Economists at Commerzbank do not expect rate hikes to undermine the yellow metal.

Fed meeting moving into focus

“There are hopes that the war in Ukraine might end. This is increasing risk appetite among market participants and reducing demand for gold as a safe haven accordingly. Bond yields are also rising significantly in response to the supposed easing of tensions, which makes gold as a non-interest-bearing investment less attractive.” 

“We envisage a total of six rate hikes of 25 basis points each by year’s end. The Fed Fund Futures are now even pricing in almost seven rate increases for this year. This should no longer weigh additionally on the gold price. This would change if the Fed were to incorporate a more pronounced rate hike at some point. It will be important therefore to see how inflation develops over the next few months.”

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

AUD/USD consolidates in a range above mid-0.6700s

AUD/USD consolidates in a range above mid-0.6700s

AUD/USD holds steady above mid-0.6700s during the Asian session on Tuesday. The US Dollar languishes near a three-month low touched on Monday. Apart from this, the prevalent risk-on environment, bets that the RBA could be raising interest rates again and hopes for more stimulus from China lend support to the pair.

AUD/USD News

USD/JPY attracts some buyers above 158.00, investors await US Retail Sales data

USD/JPY attracts some buyers above 158.00, investors await US Retail Sales data

USD/JPY trades on a stronger note around 158.30 on Tuesday during the early Asian trading hours. The uptick of the pair is bolstered by the modest rebound in US Dollar. Investors will take more cues from the US June Retail Sales and the speech from the Federal Reserve’s Adriana Kugler.

USD/JPY News

Gold price holds comfortably above $2,400 amid September Fed rate cut bets

Gold price holds comfortably above $2,400 amid September Fed rate cut bets

Gold price is seen consolidating in a range during the Asian session on Tuesday. Growing acceptance that the Fed will start cutting interest rates in September keeps the US Dollar close to over a three-month low and continues to offer support to the non-yielding yellow metal. The upbeat market mood is seen acting as a headwind for the safe-haven precious metal.

Gold News

Meme coins soar in double-digit gains as PEPE, WIF, FLOKI, MOG lead the charge

Meme coins soar in double-digit gains as PEPE, WIF, FLOKI, MOG lead the charge

Meme coins are leading the crypto market again as the ripple effect of Bitcoin's recovery is flowing across major crypto categories. PEPE, WIF, FLOKI and MOG are at the forefront of the recovery, elevating their daily performance above the 20% mark on Monday.

Read more

The Trump trade

The Trump trade

The US markets may have had a mild reaction to the assassination attempt on Donald Trump at a rally in Pennsylvania at the weekend, however, there are long term ramifications for financial markets, particularly in Europe.

Read more

Forex MAJORS

Cryptocurrencies

Signatures