Gold prices hit a five-week low on Monday as markets strengthened for some time, with markets closely watching the US Federal Reserve meeting for clues as to when the central bank will begin reducing its pandemic-era stimulus. So, what levels might be next? Here are the comments of 2 analysts…
Gold fiadollaryellow at all-time lows
Spot gold fell 0.3 percent to $1,748.13 an ounce, touching $1,741.86, the lowest since Aug. U.S. gold futures were down 0.2 percent to $1,748.60. The dollar index, on the other hand, hit a one-month high, hurting gold’s attractiveness to holders of other currencies.
Stephen Innes, managing partner of SPI Asset Management, said that he is starting to think that the announcement of the US Federal Reserve to reduce asset purchases in the market may be heard soon and it may be a surprise that a hard monetary policy will be followed in the dot charts. Bullion is seen as a hedge against inflation and currency depreciation from widespread stimulus. The Fed’s reduction in asset purchases could overcome these two conditions and reduce the attractiveness of gold.
“The markets seem to be pretty bearish on gold as some critical support levels ($1,780 and $1,750) are exposed, paving the way for a test of $1,700,” Innes said. While the Fed opens the door to reducing monthly bond purchases at its meeting on September 21-22, it is expected to bind the actual change in employment growth in the US in September and beyond.
Oanda analyst: Gold could test these levels
“Gold’s price action is sinister, especially as the strength of the dollar continues and US yields continue to strengthen,” Jeffrey Halley, senior market analyst at OANDA Asia Pacific, said in a note. Halley said that the precious metal is likely to test the $1,720 level with long-term support around $1,675.
Gold seems to have rebounded to $1,757 an ounce at the time of writing, following the decline in morning saadollars. Still, it is worth noting that the $1,825 levels seen earlier in the month are well behind. For more gold news Cryptocoin. com “Weekly Gold Price Forecast: Here are the Levels, Dates and Expectations!” You can review the article.