The Fed’s most aggressive tightening cycle since the Paul Volcker era in the 1980s continues the strong dollar theme. Seeing an opportunity to buy gold in the long term, experts announced that they expect new records of 1,250 lira per gram and above in the last quarter of the year.
The expectation that the US Federal Reserve (Fed) will continue with its extremely aggressive hawkish monetary policy put pressure on stocks in the markets, while increasing the US Treasury bond yields and the dollar index. The rise of these assets is suppressing precious metal performance. Although it showed a slight increase after the statements of Russian President Vladimir Putin the previous day, the ounce of gold, which lost value again after the Fed, retreated to $ 1.656, and found buyers above $ 1.660 yesterday. For a while, gold is expected to stay in the $ 1.660-1,680 band.
Rate Forecasts Point To The Fed’s Falcon
The monthly outlook for ounce gold indicates that the depressive movements will continue. The Fed made an expected 75 basis point rate hike with 80 percent probability. Thus, the Fed has reduced the policy rate to the range of 3.00-3.25 percent. This is the most aggressive tightening cycle since the Paul Volcker era in the 1980s. In the economic projections announced by the Fed, there are signs that interest rates will remain high in the long run. 2022 year-end average Fed funds rate was announced as 4.4%. Six members voted between 4.4% and 4.9% on the dot chart. This is more hawkish than expected. The median for 2023 was announced as 4.6%. The interest rate projections in the announced projections indicate that the Fed has become hawkish. In this case, the strong dollar theme can be expected to continue.
According to experts, we will continue to watch the movements of gold between 1.660/1,680 due to the strong dollar. A break of 1.660 in the current trend could deepen the decline. It is noted here that 1.648 is an important support. A move above $1,690 is required for a meaningful rise. A breach of this level poses a resistance at $1,705.
In the last quarter of the year, gram gold is expected to be 1,250 lira and above
With the effect of the increasing political concerns between Russia and Ukraine and the support received from the level of 980.25 TL, increases in under grams are observed. 1.008 TL can be viewed as resistance in the rises. In pullbacks and pricing below 980.25, 968 and 953.50 form support. In the long term, there are experts who see a buying opportunity in gold. Many precious metals experts emphasize that they expect new records of 1,250 lira per gram and above in the last quarter of the year.
Miners Expect $1,800
Gold miners believe that the interest in gold will continue despite the most hawkish rate hikes from the Fed in the last 10 years. The survey conducted with the managers of 10 mining companies participating in the Denver Gold Forum revealed the expectation that the price will reach the level of 1806.10 dollars ounce by the end of the year. In his speech, World Gold Council President Joseph Cavatoni said, “You will continue to see that investors, including central banks, continue to be interested in gold purchases. “Geopolitical risks continue to keep gold at the forefront of investors’ minds,” he said.