Gold is ending the week trading close to $1,800 an ounce as the precious metal has found support from rising tensions between the US and China following Nancy Pelosi’s visit to Taiwan as well as fears that major economies are facing recession.
Yesterday brought confirmation that the Bank of England would indeed raise its benchmark rate by 50 basis points but rather than this prove a negative for gold as rising interest rates typically are, the supporting commentary was the focus with the central bank painting a pretty pessimistic picture of the country’s economic outlook.
Across the Atlantic the rhetoric remains very hawkish with Cleveland Federal Reserve Bank President Loretta Mester reiterating the bank’s commitment to bringing inflation down which may require interest rates to be raised above 4%.
Today’s release of the latest US jobs data will provide the latest indicator of the health of the US economy with the expectation that for now at least the employment picture remains positive. This will give the Fed further scope for future rate rises without risking tipping the economy into recession. In such an environment gold’s upside gains are likely to be capped with $1,800 an ounce an obvious near-term resistance level.
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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