As oil prices retreat and inflation worries temporarily fade, why can gold bulls always stage a dramatic comeback at key moments? $XAU $XAUT
Gold has recently climbed back above $4,120 per ounce, gaining more than 1% intraday. At first glance, easing geopolitical tensions have driven oil prices lower, directly relieving inflationary pressure. In reality, the move reflects the market’s sensitive tussle over a shift in Fed policy.
Although institutions such as Goldman Sachs have lowered their year-end forecasts amid signs of a hawkish tilt from the Fed, the backdrop of massive U.S. debt and persistent structural inflation remains unchanged. Gold’s role as an ultimate safe haven and hedging tool remains firmly intact.
Gold prices are likely to remain elevated and range-bound in the near term. If upcoming inflation data comes in lower than expected, easing rate-hike expectations, gold could make another run at its previous high.
If the Fed maintains its hawkish stance, markets will see frequent bouts of back-and-forth volatility and shakeouts.
DYOR
Gold has recently climbed back above $4,120 per ounce, gaining more than 1% intraday. At first glance, easing geopolitical tensions have driven oil prices lower, directly relieving inflationary pressure. In reality, the move reflects the market’s sensitive tussle over a shift in Fed policy.
Although institutions such as Goldman Sachs have lowered their year-end forecasts amid signs of a hawkish tilt from the Fed, the backdrop of massive U.S. debt and persistent structural inflation remains unchanged. Gold’s role as an ultimate safe haven and hedging tool remains firmly intact.
Gold prices are likely to remain elevated and range-bound in the near term. If upcoming inflation data comes in lower than expected, easing rate-hike expectations, gold could make another run at its previous high.
If the Fed maintains its hawkish stance, markets will see frequent bouts of back-and-forth volatility and shakeouts.
DYOR
