Last minute: Gold in international markets continues its free-floating movement due to data on the shrinking US economy and aggressive statements from the Fed. However, despite the strong dollar, limited decreases below the ounce and price fluctuations in the $ 1,830 – $ 1,810 range they are helping to improve technical expectations.
Gold prices hover between small gains and losses as investors react to weak US GDP data indicating a 1.6% contraction and aggressive comments from the Fed chairman. The price of ounce gold is currently traded at $ 1801. The price of Gram gold also satisfies the 967 lire buyer.
The first support for gold is seen in the area of $ 1,810, followed by the psychological level of $ 1,800, followed by the May low of $ 1,786. For the upward movement to continue, the $ 1.835-1.845 area, where the 20 and 200-day moving averages converge, must be regained. Analysts say that if a break above $ 1,845 occurs, it could pave the way for the $ 1,880 region.
“DON’T FORGET THAT THE INCREASE OF INTEREST WILL CONTINUE WHEN TAKING A POSITION”
TD Securities says there has been a delay in the upward movement in the gold markets for a while. “As a hawkish Fed regime collides with recession fears, the yellow metal is being pulled in two directions,” warn TD strategists.
THIRD QUARTER NOTICE TO GOLD INVESTORS
According to the news from Evrim Küçük of Dünya, as geopolitical tensions, supply shortages, high inflation and weak economic prospects are becoming increasingly evident, central banks are tightening their monetary policy in this tense environment. However, arguing that weaker economic data could drive interest rate expectations down until the end of the year, Erste Group recommends keeping gold in its investment portfolio in the third quarter. The Austrian-based financial institution expects an ounce of gold to rise to $ 1,880 in the July-September period.
The factors that support the price increase are listed as follows:
The price of gold fell 5.5% in the second quarter. Prices have not changed in dollars since the beginning of the year, but increased by 8.8 percent in euros over the same period.
Demand for gold through ETFs remained positive, increasing by 312 tonnes in the first half. Globally, gold holdings held via ETFs currently stand at 3,869 tonnes, just 1% below the record level of November 2020.
Investors’ need for safe haven assets remained intact in the third quarter, given heightened uncertainty in financial markets.
The war in Ukraine is not expected to end anytime soon.
Economic growth has been revised downwards in recent months.
Equity indices are in high volatility.
New steps are expected on the interest front. However, real yields remain strongly negative. This is a positive environment for the price of gold.
- Central banks see gold as part of their reserves and remain on the buying side. We expect the price of gold to rise to around $ 1,880 in the third quarter.