TD Economists Scared: Gold Will Fall To These Lows!

TD Economists Scared: Gold Will Fall To These Lows!

US CPI data was released on Friday, beating expectations. Although gold initially responded with a decline, it later rose with a strong move. However, the yellow metal failed to pick up the week where it left off. Gold fell from a five-week high of $1,879. However, TD Securities believes the losses aren’t limited to that.

“High inflation will push gold prices to $1.830-$24 in the short-term”

On a day when the crypto market turned into a bloodbath, the price of gold rose as well favor. Spot gold prices are down 0.85% daily at the time of writing to $1,855. Gold futures, on the other hand, last traded at $1,857, down 0.98%.

TD securities economists assessed recent developments in the markets. As a result, economists have announced that they expect the yellow metal to give up all of those gains. In this regard, they note that gold tends to fall below $1,800 while interest rates are rising sharply. Economists are forecasting the following levels for the price of gold in the short term:

High inflation should pull gold prices into the $1,830-$24 trading range in the short term. In the long term, the yellow metal should fall well below $1,800.

TD Securities: Our predicted fix is ​​no smash

How to Follow on News, USA The inflation data came in quite warm. The CPI was expected to be 8.3%. However, the numbers showed 8.6%. This proved that the US Federal Reserve will act more decisively in the rate hike process. At the same time, analysts see the possibility of the Fed taking steps towards more hawks.

TD Securities economists also consider energy and other price pressures in the economy. Given this data, economists are betting that gold is bottomed on the horizon. They explain why:

It is quite possible that the Fed will roll back the hikes by sacrificing price stability in exchange for full employment. However, it is too early to say that they will soon lead to political uncertainty. Therefore, our expected solution is not a router. Therefore, we believe that we will be faced with a recovery in the price of gold in the next year.

However, the Federal Reserve’s move will be the focus of markets at this week’s meeting. According to analysts, it is very likely that the Fed will rise by 50 basis points. However, it’s not clear if a 75 bp rabbit will come out of the hat. In addition, it is very important how he will behave not only in this meeting, but also in other meetings in other months. As such, eyes will be on Fed Chair Jerome Powell’s speech following the decision.

Leave a Comment