Grams of gold surpassed 1000 TL as the rise in gold prices, which according to Federal Reserve Board (Fed) Chairman Jerome Powell began, continued. Experts predict that gold will remain in positive territory this week.
Gold prices rose after Federal Reserve Chair Jerome Powell’s comments on future rate hikes turned out to be less hawkish than expected.
Spot gold is up more than 0.7 percent today to nearly $1750 an ounce.
Gold prices rose following today’s US growth data release. Gold prices rose as the US economy’s contraction and recession in the second quarter would make it harder for the Fed to fight inflation.
DOLLAR DOWN, GOLD INCREASED BY DECISION OF INTERESTS DECISION
The dollar, moving in the opposite direction with gold, lost value today.
Yesterday, the Fed raised interest rates by 75 basis points, cutting rates from 1.50-1.75 percent to 2.25-2.50 percent. Market expectations were also 75 basis points higher.
Fed Chair Powell signaled at a news conference yesterday that he was determined to bring inflation under control. Powell outlined his expectations for the magnitude of the next rate hike, saying it would be appropriate to slow rate hikes at some point.
The Fed’s rate hikes put pressure on gold prices as the dollar’s interest income rose. With the market buying of Powell’s statement that “at some point, rate hikes will slow down,” the value of the dollar fell while commodities such as oil and gold rose.
Edward Meir, an analyst in ED&F Man Group’s financial services division, told Reuters: “Powell left the door slightly open to review the interest rate situation and shed some sort of light at the end of the tunnel that we don’t see rising rates next will be years,” he said.
‘CAN TEST RESISTANCE BETWEEN $1780-1800’
“This move led to the volatility we’ve seen in gold and caused dollar and US yields to fall,” Meir said. In the short term, gold prices are expected to continue higher with a good chance to test resistance between $1780 and $1800 next month,” he added.
Analysts at Canada-based investment bank TD Securities said they believe inflation will not provide any respite in the short term. “As Fed officials have repeatedly emphasized, policymakers are looking for compelling evidence that inflation is declining before halting the ongoing tightening process,” analysts said. Should our forecast prove to be correct, this could be the case at the end of Q4 at the beginning of 2023 at the earliest.”
“GOLD WILL STAY IN POSITIVE TERRITORY THIS WEEK”
Ravi Singh, head of research at India-based Share India, said he expects gold prices to remain in positive territory this week, The Economic Times reported.
As reported by India Express, Tapan Patel, a senior analyst at HDCF Securities, said gold rallied in line with expectations following the Fed’s rate hike, and the sharp decline in the dollar index supported yellow metal buying.
THE LATEST SITUATION IN THE GOLD MARKET
While the ounce of gold touched $1748 in the afternoon, the gram of gold rose to 1008 TL on these developments, causing the dollar/TL rate to move to 17.92.
While cumhuriyet gold traded with a purchase price of TL 6,000 528 and a selling price of TL 6,000 632, quarter gold traded with a buying price of TL 1637 and a selling price of TL 1664.
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