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.
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FXStreet Insights Team
FXStreet
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