Gold Price Forecasts: the Yellow Metal Risks to Collapse

Gold Price Forecasts: the Yellow Metal Risks to Collapse
Gold Price Forecasts: the Yellow Metal Risks to Collapse
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The price of Gold appears to be consolidating after the previous bearish phase, with bears appearing to be taking a break before resuming the short phase. This pause in the rally in the US bond yield combined with the sharp rally in the US dollar is offering a temporary respite for the Gold bulls. However, this pause could be short-lived due to a strong tightening of the tones of the FED, which has become even more aggressive.

Yesterday’s US inflation data surpassed estimates and destroyed the “peak of inflation“, Suggesting that the Federal Reserve will likely continue the path of interest rate hikes more aggressively in an effort to control inflation.

In fact, the FedWatch tool is showing a 36% chance of an interest rate hike by one percentage point next week.

The price of gold close to a capitulation?

The attention of Gold investors turns to the key events of the United States, which showed an IPP figure perfectly in the expectations of the analysts.

A further step back from the institutions reported by the usual weekly Commitments of Traders (COT) report of the Commodity Futures Trading Commission (CFTC), which, it should be noted, provides a detailed analysis of the net positions of the institutions on the futures markets.

Compared to the previous week, the institutional position in favor of Gold decreased by 11.72%, going from 117.7K to 103.9K. It could give the necessary bearish push to the Gold price as retail traders use this data to figure out which position to take in the market, making the situation worse.

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The price of Gold at the time of writing is stable just above the $ 1,700 psychological level (and support), the last major obstacle before the possible capitulation.

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Today’s US data has given the bulls breathless but the Fed seems to have every intention of going all the way and this could lead to the start of a new bearish move with two consistent medium-term targets, the annual levels 1.673 , $ 30 (lower bound of the demand area just below $ 1,700) and $ 1,635.70.

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The article is in Italian

Tags: Gold Price Forecasts Yellow Metal Risks Collapse

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