Gold is now in a much better position to receive Wednesday’s announcement from Federal Reserve Chair Jerome Powell, according to market analyst Anna Golubova. But can it lift a more hawkish message from the central bank? Cryptocoin. com, we have compiled analisdollarserin reviews looking for an answer to this question for you.
OECD raises inflation outlook for G7 countries for next year
Analyst Anna Golubova says that after gold slumped by $50 last week, Evergrande concerns rocked the markets earlier this week, pushing double-digit gains into ceredollars. Alongside the increasing volatility in global equity markets, the OECD raised its inflation outlook for nearly all G7 countries for the remainder of this year and next year. The OECD report includes the following assessment:
Near-term inflation risks are on the upside, especially if consumers’ pent-up demand is stronger than expected or if supply pressures take a long time to overcome. Coherent monetary policy should be maintained, but clear guidance is needed on the horizon and scope within which any inflation overshoot will be tolerated.
OECD forecasts US inflation to stay above 3% over the next year. The report highlights the following points regarding inflation:
Inflation is expected to settle above the average rates seen before the pandemic. After years of below-target inflation results, these satisfactions are met, but they also point to potential risks.
“ U.S. dollar, coupled with Fed’s expectations, keeps gold price in check“
For the Fed, this means that it needs to be extra cautious about when and how much is best to cut back on its $120 billion monthly asset purchases. Analyst Anna Golubova notes that the precious metal is still facing significant headwinds with the Fed’s Wednesday announcement, as any hint of a hawkish tapering timeline will send the dollar down once again. Commerzbank analyst Daniel Briesemann comments:
Combined with the expectations of the US Fed, which will start its two-day meeting today, the US dollar seems to keep the gold price under control.
BBH Global Currency Strategy assesses that China’s Evergrande situation has no impact on the Fed’s negotiations or decisions. BBH chairman Win Thin said:
No change in policy is expected. However, we expect a hawkish stance as the official statement and minutes should continue to lay the groundwork for tapering this year.
Win Thin adds that the Fed is expected to officially announce tapering at its November meeting, with the expected start in December.
TDS strategistdollarseries thinks Fed’s announcement could be devastating for gold
The US central bank will also release a set of elevated k projections, including the dot chart. Most Analisdollarserine is waiting for the tapering to be mentioned, but anticipating that the announcement will come soon after an official announcement. ABN AMRO senior st. Bill Diviney explains his expectation from the meeting:
As a common view, we do not expect an official change to be announced at this meeting. However, we are likely to see some changes in the policy statement that an announcement regarding tapering is imminent. Specifically, the Fed could change the portion of its July policy statement that pointed to the pace of asset purchases to move towards its targets, to “further progress towards these targets and this likely warrants a slowdown in the pace of asset purchases at upcoming meetings.”
TD Securities commodity strategydollarseries thinks the Fed’s announcement could be devastating for the precious metal, especially if the updated dot chart has a hawkish trend:
Recall that for the median to go higher, only two officials need to mark the 2022 points. In this context, the stagflation narrative captures the common sense of the market as participants look to a period of high inflation and slowing growth. However, this has not yet turned into an additional interest in gold.
OANDA senior market analyst Edward Moya notes that investors started bidding for a hawkish statement Wednesday, which could hurt gold’s recovery. “Gold’s recovery should start to lose momentum soon, as prices face strong resistance at $1,800,” says Edward Moya.