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Will gold prices continue to decline? The British giant bank has announced! In the third quarter … – The right address for financial news

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In the face of high inflation, the stance of major central banks to do whatever it takes despite the potential for countries to enter recession continues to erode risk appetite in equity markets.

Making a statement yesterday, US Federal Reserve (Fed) Chairman Jerome Powell said tightening policies can bring problems to the country’s economy, but the dynamics of the economy are able to cope with these policies. . Cleveland Fed Chair Loretta Mester stressed that they should be concerned about long-term inflation expectations and said they should act quickly to reverse the upward trend in prices.

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On the other hand, while the US economy contracted 1.6 percent in the first quarter of the year, more than expected, personal expenses increased 1.8 percent in the first quarter, but remained well below the projections. As for prices in money markets, a 75 basis point rate hike is considered certain at the July meeting, while expectations for a 50 basis point rate hike at the September meeting continue to strengthen.

THE DOLLAR INDEX IS A MAXIMUM OF TWO WEEKS

While the aforementioned developments reinforced fears of a recession, the US 10-year bond yield followed the downtrend for the second day due to the weighted buying trend in the bond markets, while the dollar index is climbed to 105.2, the highest level since June 16, due to rising dollar demand.

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PRICES IN DOLLARS AND EUROS

With the steps taken by the BRSA on Friday last week, TL has seen gains in value against the dollar and there have been sharp bearish moves in parity. As of the current week at 16.80 levels with these movements, the parity is priced at 16.64 on the fourth trading day of the week. Euro / TL is at the level of 17.30 lire.

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ONS AND GRAMS PRICE GOLD

In an environment of rising interest rates, it carries out prices under pressure per ounce of gold. The ounce of gold is moving sideways to $ 1816 on the new day. In the technical examination of the ounce of gold, the 1830 – 1845 – 1860 levels are followed as resistance and the 1810 – 1798 – 1785 levels as support points. The price of the gram of gold remains in the range of 760-780 lire. Currently, the price per gram of gold meets the buyer at the level of 970 lire.

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WHY ARE THE PRICES OF GOLD FALLING?

According to economists, the continued strength of the dollar is cited as the reason for gold’s further decline. The strategists make the following assessment on the topic:
“Weaker US economic data appears to underpin the solid dollar. Meanwhile, consumer confidence unexpectedly dropped sharply in June. This is due to the fact that some market participants’ expectations for a rate hike have slightly decreased. Because they assume the Fed won’t raise interest rates that fast despite the increasingly pessimistic economic outlook. This will somewhat reduce the risk of recession ”.

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STANDARD RENTED

Commenting on gold prices, Standard Chartered precious metals analyst Suki Cooper said, “Gold is trapped between expectations of sharper rate hikes and long-term concerns of high inflation if policy monetary policy will not be able to soften economic activity and curb inflation “. This inactivity meant that gold remained largely limited and stable. Cooper said the big macro expectation for the remainder of 2022 is for the focus to shift from inflation to recession risks.

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“Gold continues to benefit from safe-haven demand due to high geopolitical risk and concerns about market volatility in lower equity markets,” Cooper wrote in a recent report. but the prize has eroded, ”he said. According to the analyst, this situation is likely to lead to a drop in gold prices in the second half of the year. “The increased risk of recession is holding back open interest for now, but we expect gold to return to real yields for the remainder of 2022 and to drive gold prices down,” the analyst said.

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HAS ANNOUNCED ITS FORECASTS FOR THE THIRD QUARTER

Standard Chartered’s third-quarter gold price forecast was $ 1850. “Aggressive rate hikes typically put pressure on gold prices. We expect this to happen during the current Fed cycle, “Cooper said.” However, recent shifts in gold positions have deviated from the historical trend. This time around, positioning improved ahead of the Fed’s first hike in March as the geopolitical risk premium offset concerns about the rate hike. Then, in the three months since the first hike, interest has fallen (rather than recovered). Despite this downsizing, the net length of the fund is still high compared to previous cycles, suggesting that the downside risk to gold prices increases as inflation falls. “

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