Gold is starting a new trading week near the top end of its recent range as it hangs on to Friday’s gain generated by a slight US dollar weakening.
After last week’s busy week of interest rate increases, this week has a more geopolitical feel with COP27 and the US midterm elections the significant events. With neither likely to have a direct impact on gold, its price is likely to remain in its recent range either side of $1,650 an ounce with the relative strength or weakness of the dollar the main driver.
Today brings three Federal Reserve officials speaking at events and their words will be closely analysed for investors seeking insight into their position on how much further the US central bank will need to raise rates in the coming months. Expectation has cooled slightly that the Fed will unwind its rate hikes as soon as the start of next year so that downward pressure from high-interest rates will make it hard for gold to make significant gains.
While last week’s slight bounce underlined that there is still support for gold, the Fed’s interest rate trajectory is likely to keep $1,700 an ounce off the table for the precious metal. Equally, there is sufficient support, particularly from physical buyers in Asia, to keep prices above $1,600 an ounce with gold instead likely to continue its range-bound trading for the foreseeable future.
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