The recent weakness of the dollar caused the price of gold to test $1,780. However, the Federal Reserve’s commitment to reduce inflation with a tighter monetary policy leaves room for gains in the dollar, they report. ANZ Bank strategists.
The Fed will raise another 100 basis points
“Softer-than-expected inflation in the US triggered a dollar sell-off, pushing gold higher. However, inflation remains well above the central bank’s target range of 2%. This leaves room for further adjustment until inflation slows down considerably.
“US benchmark yields are rising and are likely to move higher on the prospect of another 100 basis point rate hike from the Fed. Investment demand is stabilizing, with the slowdown in ETF exits and short hedging.”
“Physical demand for gold is weakening, although central bank purchases remain strong.”
Source: Fx Street
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