Gold has almost recovered the losses it had suffered after the strong US inflation data. Commerzbank analysts analyze the prospects for the yellow metal.
Gold investments would remain at a clear disadvantage compared to US interest-bearing assets
It appears that interest rate cuts remain likely this year, albeit at a slightly later date. This is confirmed by the statements of the FOMC members. Recently, they had limited themselves to questioning the market's anticipation of a reversal in interest rates, but not the rate cuts themselves.
However, gold's upside potential remains limited. This is because the continued strength of the US economy, coupled with stubbornly high inflation, militates against a steep rate cut cycle, meaning Gold investments would remain at a significant disadvantage relative to US interest-bearing assets.
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.
