© Reuters.
Investing.com – It rose today, Friday, coinciding with encouraging statements from the dollar regarding the conditions for stopping raising the dollar, which prompted the dollar to turn its direction towards the downside, after it was bullish during yesterday’s trading.
Investors saw the Fed’s comments yesterday as support for accommodative monetary policy, as Fed member Bostick said last night that “slow and steady will be the appropriate course of action”, despite new employment data adding to a series of strong data recently. Gold ignored its previous losses that surrounded it after data indicating rising inflation and the strength of the labor market, which supports the Federal Reserve’s tendency to continue increasing interest rates.
to update
Futures contracts for the yellow metal rose during these moments, from trading today, Friday, to levels of $ 1854 an ounce, or the equivalent of an increase of 0.75%.
On the other hand, the US dollar rose during these moments of today’s trading, as the yellow metal rose by 0.7%, to levels of $1848.3 an ounce.
Read also
gold now
Gold in instant transactions rose 0.45 percent to $ 1843.57 an ounce. It seems destined to record the largest weekly increase since mid-January, with the decline of the dollar.
US gold futures rose 0.5 percent to $1,849.50.
It decreased to 104.7 points, or 0.25%.
Federal remarks
Atlanta President Rafael Bostick said Thursday that the impact of higher rates on the economy may only start to become evident this spring, an argument that calls for the Federal Reserve to stick with raising interest rates.
He continued, “I still think a lot that stability will be the appropriate course of action. The cumulative effect of increasing the interest rate should continue through the spring … Going at a measured pace reduces the possibility of harming the economy.”
Bostick said the Fed may be close to a breakpoint in the rate increases that raised the target federal funds rate from near zero a year ago to a “restricted” level between 4.5% and 4.75% as of February.
He added, “Another half percentage point of interest rate increases has been determined as likely need is, but that depends on upcoming data on the economy.”
He said: “At this point, members of the Atlanta Fed are divided in their views as to why rapid interest rate increases have not yet done more to slow consumer and business spending, with some arguing that higher interest rates may be needed and others feeling It is only a matter of time before tightening monetary policy has its usual effect.”
When does the interest rate hike end?
Markets are now focused on where interest rates will peak, with swaps betting on a peak in policy rates of 5.5% in September and some dealers betting on a rise to 6%.
David Spica, President and Chief Investment Officer of Guidstone Capital Management, said: “The markets are now betting on rising inflation, as well as on the impact of economic activity on rising interest rates.”
And he continued: “What we witnessed in January, and in fact the matter since October of last year, from a false expectation of the markets through a shift in the Federal Reserve’s policy, a decrease in the inflation rate, the central bank’s cessation of raising interest rates, and a smooth landing of the economy; all of these expectations were misleading.” And the Fed will have to keep raising interest rates.”
While Sarah Hunt of “Alpine Woods Capital Investors” said: “Part of the impact of the continued rate hike by the Fed may not be clear yet.”
gold forecast
There are growing concerns that the Federal Reserve will smash something in the economy by being overly tightening. In this scenario, gold could reach new highs this year, according to the LBMA Gold Price Survey.
Having started the year on a high and then slumped in February, analysts have pointed to three key factors that gold will depend on for the rest of 2023 – the Fed’s dollar outlook, inflation and geopolitics.
With the participation of 30 analysts in this year’s annual LBMA poll, the forecast was for an average of $1,860 an ounce, and silver at $23.65 an ounce. The range for gold was between $1,594 and $2,025 an ounce, and the range was between $17.40 and $27 an ounce.
These expectations come as the markets are re-pricing the expectations of raising the Federal Reserve interest rate and keeping it higher for a longer period. And now gold analysts are warning that the US central bank could break something in the economy as a result of raising rates too quickly.
Technical analysis of gold:
