cairo_ 22-2- 2023
For the fourth week in a row, the global price of gold on global stock exchanges declined to less than $1,850 an ounce, in anticipation of the upcoming decision of the US Federal Bank, which is trying to reduce the inflation rate to 2%, which despite the improvement in US economic performance indicators, it slowed down from all expectations, which prompted Experts believe that the Federal Reserve will raise the interest rate at its next meeting by fifty basis points, given that controlling inflation has become more difficult than expected.
We agree with global market experts that more interest will be directly reflected in the movement of investment in gold, but the specter of recession with the continuous increase in interest rates is threatening the American markets, which the American economy will not bear, especially with the tendency of many global economic blocs to refrain from relying on the dollar in The global trade movement is another specter that puts pressure on the US economy, but many members of the US Federal Reserve insist on continuing the strict policy, which has been repeatedly declared over the past days, which had an impact on the decline in the global price movement of gold.
Gold has struggled over the past three weeks. With gold futures contracts for the month of April declining by 1.3%, settling at $1851 an ounce and $1834 an ounce during yesterday’s trading.
Key factors that will shape the next move in the price of gold:
The first moves of the US Federal Reserve:
It is expected that the US Federal Reserve will continue to move the interest rate, which experts believe will rise in March, May, and possibly in June. Experts also see increasing chances of the Federal Reserve raising the interest rate by fifty basis points during next March, given the current indicators.
The second factor is to watch for recession risks:
It is expected that inflation will start to rise with the continuation of raising interest rates, and the US economy needs a little recession to reduce inflation, which will move gold prices to rise again.
Forecasts of the movement of gold globally:
Analysts remain largely neutral on gold in the short term as they see $1,800 an ounce as likely to hold especially as it is a massive support level.
Analysts are waiting for next week, FOMC meeting minutes from the February meeting, and PMI data, and a measure of inflation – basic personal consumption expenditures to determine the next direction of movement of the yellow metal.
As for the long term, A state of optimism prevails in the global markets that the precious metal may reach $2,000 an ounce by the end of the year or in early 2024 with the slowdown in the US economy, The US Federal Reserve will have to decide if slowing economic activity will do more harm than lowering the inflation rate to the 2% it aspires to achieve.
The local market for gold:
The situation did not differ much in the local market from the global stock exchanges, as the gold markets witnessed a decline in prices, albeit at a slower pace than the global movement. last January.
It is expected that prices will stabilize within the current limits, at least during this week, especially with the lack of clarity in the global price trend, the continuation of local inflation rates in their current limits, and the issuance of high-interest bank certificates that attracted many local investments.
Regarding gold trading prices, the goldsmiths closed their dealings yesterday, Tuesday, at a price of 1682 pounds for a 21-carat gram, 18-1442 and 24-1922, and the value of gold in the pound before calculating workmanship and tax is 13456 pounds.
The most important events expected during the week:
Wednesday : the Federal Open Market Committee meeting for the month of February.
Thursday: US GDP report for the fourth quarter, and the volume of US jobless claims.
Friday: US PCE price index and US new home sales.
