Gold Finds Sufficient Support from Flight to Haven Assets to Offset Aggressive Fed

Gold starts a new week hovering around the $1,840 an ounce mark, a level that feels like the precious metal’s natural territory right now.

While ever rising interest rates are a strong negative driver for gold, the fact the price has rebounded back to its pre-Fed rate announcement just a few days later highlights the strength of the current major market mover: rising fears of a recession.

Live Gold Price – $/oz

At first glance, gold’s performance could be deemed unspectacular as this supposed haven asset has oscillated around $1,840 an ounce (admittedly in a fairly wide range) since the middle of May. However, given the sharp falls seen on other asset classes, standing still represents a good return. Certainly holders of gold will be much happier than owners of cryptocurrencies.

Later this week we have the latest inflation data out from the UK and Canada, both of which are expected to show price pressures are continuing to rise, while everyone will be paying close attention to Federal Reserve Chair Jerome Powell when he speaks to try and predict the trajectory of the US central bank’s next rate moves following last week’s biggest rate hike in almost 30 years.

For central banks, striking the right balance between sufficient action to curb inflation while not choking economic growth is proving an almost impossible job to get right. 

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.