Gold is edging closer to $1,930 an ounce as the precious metal’s resilience despite an increasingly bearish macroeconomic for the haven asset continues to surprise.
This week is a busy week for central bank announcements, including the Federal Reserve’s latest interest rate decision, and investors have chosen to take risk off the table ahead of this potentially volatile trading week to the benefit of gold.
While the Fed is expected to keep its benchmark rates unchanged, or a “hawkish pause”, other central banks, such as the Bank of England, are still hiking theirs. This environment of high and still rising interest rates should be negative but gold, with its lack of yield makes other interest-bearing assets more attractive.
However, despite data from around the world continuing to show that economies are generally holding up well in the face of first stubbornly high inflation and then fast-rising interest rates to curb it, investors and traders remain unwilling to adopt a fully risk-on approach and continue to hold onto their golden safety blanket.
The long-term trend for gold remains more likely for it to decline than it to gain but the longer the price manages to hold above $1,900 an ounce, it will build up substantial resistance for the moment when it does finally drop below that threshold and slow its decline.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
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