Gold Set For Rare Weekly Gain Having Finally Found Support From Equity Sell-Off

Gold is set for its first weekly gain in a month having finally found some support from the broader sell-off in equities. 

Now trading between $1,840 and $1,850 an ounce, gold has responded positively after starting the week below $1,800 an ounce. In such volatile and jittery trading conditions, with investor confidence hit by sustained elevated inflation and broader growth concerns, gold initially saw it being dragged down rather than benefiting from haven seekers. 

The main headwind for gold remains the Federal Reserve’s hawkish monetary policy, with further interest rate rises of 50 basis points all but guaranteed in both June and July.

Live Gold Price – $/oz

This macroeconomic climate will cap how much territory gold can recover but the strong initial recovery after slipping below $1,800 demonstrates where the strongest support for gold lies.

The recent dominance of the Fed’s actions as the driver for the gold price has overshadowed other factors that are supportive for the ultimate haven asset.

The war in Ukraine is sadly showing no sign of ending any time soon while the cause of the Fed’s hawkish pivot, rising inflation, is in itself a supportive factor for gold as an asset that has proven itself to hold its relative value over centuries.

Now that gold has finally found some support, the price may well be set for a period of sideways trading around its current range.

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 greenwashing while investing sustainably.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.