Gold is showing signs of stabilising after last week’s fall with the precious metal trading just below $1,850 an ounce.
With little in the way of macroeconomic data releases or geopolitical news to drive prices today, traders and investors are taking the opportunity to fully assess the true state of markets, as well as the likeliest interest rate curve trajectory for the Federal Reserve and other major central banks.
In this environment, gold’s tumble has paused with the $100 an ounce drop in price since the start of February deemed sufficient punishment for an asset that was trading on a future scenario rather than present-day reality.
Later this week the minutes from the Federal Open Market Committee meeting from three weeks ago will be released, which should provide better insight into how hawkish the Fed remains after recent remarks by central bankers suggested a return to 50 basis point hikes was on the cards.
These hawkish comments were the trigger for gold’s price fall, so holders of the precious metal will be hoping that the minutes prove more dovish.
After a difficult week, gold is likely to drift sideways this week with the depth of support from central bank buying ensuring the downside is supported while the current environment in which more interest rate hikes are still likely means the upside potential for gold is also capped.
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.
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.