According to strategist David Song, the Fed rate decision on September 22 seems to change the short-term gold price outlook, as the central bank appears to be on its way to reducing monetary support. Market analyst Haresh Menghani, on the other hand, points out that while the focus shifts to the FOMC meeting, bears have taken control. Cryptocoin. com
As , we have compiled the evaluations of two analysts on gold prices for you.
Strategist David Song’s basic forecast for gold price: Neutral
Gold fell to a new monthly low ($1,745) ahead of the Federal Open Market Committee’s (FOMC) quarterly meeting, as the better-than-expected US Retail Sales report fueled speculation about an imminent change in Fed policy and new developments broke out. . Strategist David Song states that Chairman Jerome Powell and the Committee may drag the nugget if they present a temporary exit strategy, commenting:
Plans to reduce purchases of Treasury securities and Mortgage-Backed Securities could reduce gold’s appeal as it signals higher US interest rates. But if the central bank is more willing to normalize monetary policy sooner rather than later, gold bullion may face a more downside fate.
According to David Song, the update in the Summary of Forecasts (SEP) states that the slowdown in the US Consumer Price Index (CPI) strengthens the Fed’s expectation for a temporary increase in inflation and supports the expectation of an upward revision in inflation. may reveal a significant change in policy outlook.
The strategist predicts that the gold price could be pushed to new monthly lows as Chairman Jerome Powell and the Committee currently forecast two rate hikes in 2023, according to the interest rate dot chart.
However, as market participants raise bets on higher interest rates, more from Fed officials may support the gold price and bullion may trade within a range in the near-term while maintaining its March low ($1,677) in the second half of the year. On the other hand, the recovery from the August low ($1,682) could emerge as a correction to the broader trend rather than a change in market behavior, as the FOMC appears to be on its way to shifting gears, leading to a key shift in Fed policy as market participants prepare for higher US interest rates. change can drag the nugget.
“Any rebound could be seen as a selling opportunity near the $1,772-74 region. ”
According to market analyst Haresh Menghani, market participants are now looking forward to the release of the Prelim Michigan US Consumer Sentiment Index, which, along with US bond yields, could influence USD price spikes. The analyst says that as the focus shifts to next week’s important FOMC meeting, a broader market risk sentiment may create some trade opportunities around gold and makes the following analysis:
Continuing selling below the $1.750 level will reaffirm the downside and make gold vulnerable. The next support was stable near the $1,729-28 area before the commodity eventually fell back to challenge the $1,700 round figure.
Haresh Menghani states that any recovery can be seen as a selling opportunity near the $1,772-74 region and continues his analysis:
That should also limit the rise near the $1,780 zone for gold and this should now act as a strong barrier. A sustained move forward could trigger a short-term move and push gold back above the $1,800 mark towards the $1,808-10 area (200-DMA).