Gold price dropped to a 10-day low near $1,730 on Monday. Economists at Commerzbank do not expect the yellow metal to stage a lasting recovery until the first quarter of next year.
Gold under pressure again due to firmer USD
“Gold price has dropped sharply again since the US Dollar ended its phase of weakness. Though the latest cooling of US inflation has dampened fears of rampant inflation and thus ever more pronounced rate hikes by the US Federal Reserve, it is still clear that the central bank has not yet finished tightening its monetary policy. After all, at 7.7% inflation is still a long way off its 2% target.
“The latest surge in the Gold price was largely attributable to short covering. This price-driving factor has now evaporated, as the most recent CFTC data for the last reporting week revealed a shift to speculative net long positions.”
“We are sticking with our assessment that the Gold price will only recover lastingly once an end to the rate hikes is in sight. This is likely to be the case in the first quarter of 2023.”
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.