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Everything you need to know about gold price at $2,000 and what to expect next
The gold market has woken up after a disappointing year. And even though geopolitics were the initial trigger that kicked off the price surge, analysts say it is now about so much more than that. Here's everything you need to know.
The precious metal is already up 9.4% year-to-date. A very strong return for gold, especially after closing 2021 down 3.6% — its worst performance since 2015.
The geopolitical uncertainty concerning Ukraine and new sanctions against Russia have created strong demand for gold. Investors view the precious metal as a hedge against risk, inflation, and economic shock.
"The price of gold is rocketing at the moment predominantly because of the geopolitical circumstances. With the increased economic instability caused by the war in Ukraine and Russia, investors are feeling nervous and pulling out of stocks and equities where the returns are dwindling and instead, putting their money into the traditional safe haven of gold," said MarketOrders co-founder and COO Sukhi Jutla. Read More
Gold price remains under pressure as consumers see inflation rising 5.4% in a year
Gold prices remain under pressure from further technical selling pressure and is seeing little reaction to weak consumer sentiment and rising inflation expectations.
Friday, the University of Michigan released its preliminary consumer sentiment survey, which showed consumer optimism falling to 59.7, down from February's reading of 62.8. The data significantly missed expectations as consensus forecasts were calling for a reading of around 61.4.
Consumer sentiment is at its lowest since 2011. Read More
Gold price pares daily losses as Biden wants to end normal trade relations with Russia
The gold market trimmed some of its early-morning losses as U.S. President Joe Biden announced that he will revoke Russia's 'permanent normal trade' status.
Losing this status would downgrade Russia's trading abilities and allow the West to impose tariffs on a wide range of Russian goods.
"Revoking this status will make it harder for Russia to do business with the U.S.," said Biden.
This will be a joint action implemented by the U.S., the European Union, Canada, France, Germany, Italy, Japan, and the U.K.
Biden added that he would also be signing an executive order banning imports of Russian diamonds, seafood, and vodka. Read More
Is gold just getting started?
Russia's war on Ukraine has passed the two-week mark and the humanitarian crisis continues to grow. More than 2 million Ukrainian refugees have flooded into Europe and those who can't leave fear for their lives as they are forced to survive uninhabitable conditions.
First and foremost, the war that Russian President Vladimir Putin is waging in Eastern Europe is an unprecedented tragedy the entire world is feeling. The worst part is that many political analysts expect that conditions will get worse before they get better.
With all this fear and uncertainty, is it any surprise that gold prices have pushed to a new all-time intra-day high above $2,000 an ounce? While prices are expected to consolidate at current levels, many analysts have said that gold remains in a very strong uptrend for the foreseeable future. It is only a matter of time before gold continues to move higher.
This past week I have been thinking about past comments from some analysts who have warned investors that they shouldn't hope for higher gold prices and it looks like those predictions are coming true.
As gold prices trade near $2,000 an ounce, we are facing a massive humanitarian crisis, inflation that threatens to spiral out of control, lower economic growth. While holding gold helps to hedge these risks, this is not a great environment for anyone. Read More
Market sentiment signals gold price needs to consolidate after pushing above $2,000
Gold's recent push above $2,000 is just the start of a bigger long-term move, even if sentiment among Wall Street analysts in the near term has weakened.
The latest results of the Kitco News Weekly Gold Survey, show no clear majority on near-term price direction among market analysts. At the same time, bullish sentiment among retail investors has also dropped from last week's elevated levels.
Many analysts have said that while gold is destined to move higher, the precious metal's push to a new all-time intraday high above $2,000 an ounce could be a sign that it is a little overextended and due for a consolidation.
"There is no question gold prices are in a bullish uptrend and prices are going higher, but there needs to be some consolidation," said Philip Streible, chief market strategist at Blue Line Futures. "You don't want to chase the market. I am looking to scale in and buy around $1,962 an ounce." Read More
What's next for gold price after making a run for record highs? Fed, Ukraine updates on deck
The Federal Reserve's interest rate decision and developments in Ukraine will dominate gold's price direction next week after the precious metal made a run for record highs.
Gold rallied on its safe-haven appeal this week as sanctions against Russia were stepped up to import bans and the war in Ukraine escalated, creating chaos in the commodities space. April Comex gold futures were last trading at $1,990.50 an ounce after briefly rising above $2,070 an ounce earlier in the week.
"Gold will continue to hover around $2,000 in the short-term. If gold closes at $1,980 an ounce, then I am bullish. If gold rises to $2,010, then I am neutral," OANDA senior market analyst Edward Moya told Kitco News.
The trading range for gold remains pretty broad due to the current volatility in many financial markets. The two leading drivers will be the Federal Reserve's meeting on Wednesday and any new developments regarding sanctions against Russia and the war in Ukraine.
"Gold could trade over the next week between $1,960 and $2,050. It is looking at a pretty wide range given the sensitivity of the situation in Ukraine. And we have the Fed policy meeting, which could provide some big shifts as to how the U.S. central bank will address the inflation outlook and more importantly what will be the path of tightening going forward," Moya said. Read More
Gold corrects after unsuccessfully challenging its record high
On Tuesday, March 8, gold traded to an intraday high of $2078, roughly $10 below the all-time high of $2088, which was achieved in August 2020. The current decline in gold is the first real price decline since January when gold hit a low of approximately $1780. Until Tuesday of this week, what followed in February was a dynamic rally resulting in gold gaining approximately $300 when gold traded to $2078. On Wednesday, March 9, gold opened above Tuesday’s closing price of $2043 but closed dramatically lower, resulting in a price decline of $72. Tuesday’s strong decline resulted in gold losing 3.49% in value, the largest single-day loss in 2022.
As of 4:45 PM EST gold futures basis, the most active April Comex contract is currently fixed at $1990.20, a net decline of $10.30 or 0.51%. However, this decline can be largely attributed to dollar strength. Currently, the dollar is up by 0.63% and with the dollar index fixed at 99.12. While gold pricing is lower today it is completely the result of dollar strength and fractional buying of gold. Read More
Image Source: Kitco News
Gold and silver dip ahead of the European open
Gold (-0.67%) has moved lower ahead of the European open to trade at $1975.23/oz. Silver (-0.70) has also been trading in the red overnight and sipped below the $26/oz area. Elsewhere in the commodities complex, copper fell 0.76% and spot WTI is 3.22% in the red.
In the risk markets, the Nikkei 225 (0.58%) and ASX (1.21%) pushed higher while the Shanghai Composite (-2.60%) struggled. Futures in Europe are pointing towards a positive cash open.
In FX markets, USD/JPY continued to advance pushing 0.46% higher. AUD/USD was also another big mover falling 0.70% overnight. In the crypto space, BTC/USD managed to rise 2.75% to trade at $38,808. Read More
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
