Gold Price Forecast: Gold Snaps Six-Day Uptrend Around $1,850

Gold Price Forecast: Gold consolidates the biggest weekly gains since May while easing to $1,859, down 0.18% intraday during early Friday. The yellow metal rallied in the last six days and crossed the key $1,832-34 hurdle earlier in the week amid the market’s rush to risk-safety on the Fed rate hike expectations, backed by the 31-year high US inflation data.

Gold Price Forecast

Gold Price Forecast: However, the latest US bonds market performance, following the Veterans Day holiday, underpins the US Dollar Index (DXY) to renew multi-day high and weigh on the gold prices. In addition to the rate hike bets, recently grim concerns over China’s Evergrande and Sino-American trade relation, as well as US stimulus, add to the US dollar strength and weigh on gold prices.

Moving on, chatters over the Fed rate hike will get fresh hints from the US Michigan Consumer Sentiment for November, expected 72.4 versus 71.7 prior, which in turn should be watched carefully for clearer direction.

Gold extended gains following the prior day’s US Consumer Price Index (CPI) which is a weight on real yields for which gold is regarded as the perfect hedge. Gold rose from a low of $1,842 to $1,866 on Thursday, adding around 0.7% by the close of Wall Street.

Gold Price Forecast

Gold climbed despite the advance in the US dollar that rose to a 16-month high a day after the strongest US inflation reading in more than three decades. Amid a holiday-thinned session, US Treasury markets were closed overnight. However, the 10-year Treasury yields implied by futures rose from 1.55% to 1.60%.

Bond yields have remained elevated due to the residual effects of the strong inflation data. The CPI is now at new cycle highs and both the yearly and monthly prints show a second straight month of accelerating gains. Consequently, the markets are expecting US interest rate hikes next year which are underpinning the US dollar.

In related markets, equities rebounded on expectations that higher consumer prices will help corporate growth. Commodity prices were mostly higher. The Bloomberg Commodity Index is up 1.3%, its strongest day since 25 October. ” The spectre of higher and entrenched inflation saw investor demand surge for the precious metal,” analysts at ANZ Bank said.

Gold Price Forecast

”Spot prices broke out of a downward trend that has been in place for the past 15 months. The move suggests the market doesn’t expect the Fed to tackle inflation soon,” the analysts added. ”For the moment, the buying hasn’t manifested itself in the exchange-traded funds market, with inflows remaining muted.”

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Gold Price Forecast: Gold Snaps Six-Day Uptrend Around $1,850 via @marketinvestor
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