2023-06-22 12:59:29
Mubasher: The statements of the US Federal Reserve President before Congress regarding the return to increase the interest rate early this year pushed global gold prices to further decline, to remain at their lowest level in nearly 3 months.
During Thursday’s trading, gold prices fell in spot transactions by 0.2%, to reach $1929.21 an ounce, compared to an increase in the dollar index by 0.08%.
The yellow metal was slightly affected today by the statements of Jerome Powell, Chairman of the Federal Reserve, who said in his testimony before Congress yesterday, Wednesday, that increasing the interest rate once more is a very good guess of what the Fed is heading towards if the economy continues in its current direction, adding that the battle to curb inflation is still going on. She has a long way to go.
5 agents
Ole Hansen, Head of Commodity Strategy at Saxo Bank, told Mubasher Information that despite the current gold decline, it is temporary because there are five main factors that support its rise in the medium term, which may be around the beginning of next year.
He pointed out that the short-term expectations indicate further consolidation of the temporary decline and its presence below the level of $2000 an ounce, while awaiting upcoming economic data.
He explained that those factors are the continued weakness of the dollar, and an economic slowdown that makes the current stock market gains unsustainable, which might drive demand for precious metals as a new safe haven.
He pointed out that among these factors is also the continued central banking demand supporting the yellow metal.
He pointed out that one of the most prominent factors is that inflation in the United States exceeded the long-term target of 2.5% set by the US Federal Reserve, if these expectations are realized.
As for the fifth of these factors, Ole Hansen explained that the matter that enhances the possibility of gold reaching a new record level above $ 2100 an ounce before the end of the year is the high degree of geopolitical changes.
Hansen believes that the risk of a further weakening of the global gold price below $1,900 an ounce is relatively unrealistic, noting that it will take a drop below $1,800 an ounce.
Geopolitical struggles
For his part, Taher Morsi, an economist and head of market research at Belun Egypt, told Mubasher Information that the major countries’ tendency to replace dollar reserves with large reserves of gold in light of the escalation of geopolitical conflicts is one of the factors that support the rise of the yellow metal and it is possible to bypass it. Levels exceeding $2,080 per ounce before the end of the year.
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