Gold’s repeated failure to press above $1,800 is causing alarm among bulls, and possibly signals a likely move downward by year end.
“So far this year, gold prices have declined by 7.5%. The gold price outlook remains negative. We keep our year-end forecast at USD 1,700 per ounce and end of 2022 at USD 1,500 per ounce,” ABN AMRO senior precious metals strategist Georgette Boele said in a report.
“Investors have adjusted their expectations regarding the Fed. They expect the Fed to hike rates quicker than they had earlier expected. Moreover, 2y U.S. Treasury yields and 2y real yields have risen to reflect this. In addition, the U.S. dollar has risen by 5% this year. Gold prices tend to weaken when the dollar rises,” Boele expanded on her opinions about the yellow metal.
“Some central banks have already started, such the central banks of Norway, New Zeeland, Brazil and South Korea. We expect the Fed to start hiking early 2023 and the Bank of England and Bank of Canada to probably hike before that. The ECB, the Bank of Japan, the Reserve Bank of Australia, the Riksbank and the Swiss National Bank will likely hike later compared to the other central banks, but the direction is towards tightening and not easing.” She said.