According to the strategists of commerzbankInterest Rate expectations are likely to continue to drive the price of Gold.
US economic data should be a key driver of gold price
The US economy grew an annualized 2.4% in the second quarter, more than expected. This means that there remains little sign of aggressive rate hikes by the US Federal Reserve, which in the eyes of the market increases the likelihood of a “soft landing” for the US economy. This view was also boosted by the Fed, which dropped its forecast for a US Recession at its meeting on Wednesday, raising key rates by 25 basis points, as expected.
This is relevant to the price of gold in the sense that rate cuts in the foreseeable future will be markedly less likely if a recession is not on the horizon. However, expectations for rate cuts next year are quite supportive for the precious metal at this point. Consequently, US economic data is likely to be closely watched in the coming days and weeks and should therefore be a key driver of the gold price.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
