Gold is facing headwinds from several fronts at once. As reported Commerzbank economists, rate hike prospects will weigh on the yellow metal.
New Fed rate hikes
“On the one hand, gold ETFs have once again posted increased outflows. Outflows over the last five trading days have totaled 14.7 tonnes, which equates to just under three tonnes per day.”
“The world’s largest and most liquid Gold ETF has also seen outflows again recently. Previously, it had posted slight net inflows for several weeks, fueling hopes that ETF investors were turning back. The notable rise in expectations appears rate hike has for now dashed such hopes.”
“According to Fed Fund Futures, interest rates are expected to peak around 5.35% in the summer. That’s about 50 basis points higher than forecast in early February. The notable rise in yields (real) bonds and the simultaneous appreciation of the US dollar are putting pressure on gold.”
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.
