Gold jumped from a three-week low on Friday after US job growth showed slower-than-anticipated growth in December. In other words, the daily went up, the weekly went down. We have compiled analisdollarserin’s opinions and analyzes for the readers of Cryptokoin.com , which evaluates the next direction of gold.
“Some decrease in real interest rates would be positive for the gold price”
“People are crazy about buying gold from the bottom,” said Nicholas Frappell, global general manager of ABC According to the report, the market still lags a bit due to the high returns at the end of last week’s close.
Treasury rates rose last week after Fed minutes showed the possibility that the central bank could shrink its balance sheet sooner than expected. Gold is considered a hedge against high inflation, but is highly susceptible to high U.S. interest rates, which increases the opportunity cost of holding non-yielding bullion. Nicholas Frappell comments:
If inflation data turns a little warmer than expected, it will only confirm people’s expectations (aggressive tightening from the Fed). We may see some decrease in real interest rates and this will be positive for the gold price.
US inflation data, followed closely by investors, will be released this week. Core CPI, which was 4.9% in the previous month, is expected to increase by 5.4% year-on-year in December. Gold price predictions by Reuters technical analyst Wang Tao are as follows:
Spot gold could test resistance at $1,801, above which a break could lead to a gain in the $1,815 to $1,830 range.
Gold still targets $1,800
According to Pablo Piovano, traders are short on Friday, given CME Group’s preliminary data for gold futures markets. They added nearly 5,000 contracts to their positions, reaching the third consecutive daily increase. Along the same lines, volume has now extended its uptrend for another session with around 47.5k contracts.
According to market analyst Pablo Piovano, Friday’s rise in yellow metal prices was behind the increasing open interest and volume, allowing further upside in the very near term. In contrast, the analyst states that the $1,800 mark for gold remains the main target for the bulls for now.
How will the gold price be affected by the US CPI data?
Gold price jumped from a three-week low on Friday after US jobs data. According to market analyst James Hyerczyk, this suggests that short-term gains will likely be limited by a longer-term view of rising interest rates. The analyst comments:
The recovery in gold prices could be a sign that investors will continue to be driven by rising inflation data until the Fed’s rate hikes begin to have a meaningful impact on rising producer and consumer prices.
The analyst states that transactions will take place in a short-term range until the release of US consumer inflation figures on Wednesday. Traders expect an increase of 0.4% in December. This means that the annual rate will increase even more. In this direction, the analyst interprets the impact of the upcoming data as follows:
The gold price may rise with the first news and weaken as investors begin to prepare for the Fed’s rate hike earlier than expected.
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