Gold Price Forecast: XAUUSD struggles amid rising rate hike expectations – Commerzbank
Gold has dropped to $1,915 – its third consecutive day of losses. Despite falling US Treasury bond yields, the US dollar gathers strength. Subsequently, the yellow metal is having a difficult time finding demand, strategists at Commerzbank report.
World Gold Council is likely to testify to robust investment demand in the first quarter
“Gold already shed 2.4% last week as interest rate expectations rose. We believe that it is also the rate hike expectations that are weighing on gold at the start of the new week.”
“Though bond yields are not climbing this time, the US dollar is appreciating. The market now also expects the ECB to begin tightening its monetary policy in the near future. A rate hike of 25 basis points at the meeting after next in late July is now almost completely priced in on the basis of the forwards.”
“In the quarterly report on gold demand trends it will be publishing on Thursday, the World Gold Council is likely to testify to robust investment demand in the first quarter. After all, gold was in considerable demand as a safe haven when the Ukraine war broke out at the end of February. And the high and further rising inflation rates have also allowed gold to shine in its capacity as a store of value.”
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FXStreet Insights Team
FXStreet
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