Gold Price Forecast: XAU/USD tends to gain once rate hike cycles begin – Commerzbank

Gold price has risen to the $1,940 area despite the US Federal Reserve rate hike. Six more hikes are expected this year. The course is thus set for the coming months, so why is XAU/USD climbing today nonetheless? A glance at previous rate hike cycles shows that gold tended to gain once the cycle began, economists at Commerzbank report.

War in Ukraine points to increased demand for gold.“Fed increased the key rate by 25 basis points. Fed Chair Powell also raised the prospect of further rate hikes. The projections of Fed members point to seven rate hikes by year’s end, including yesterday’s.”

“A glance at previous rate hike cycles shows that gold tended to gain once the cycle began. The same appears to be happening this time too, though comparisons with past rate hike cycles are difficult in view of the war in Ukraine. After all, this is an additional factor that points to increased demand for gold. .

GBP/USD tests 1.3200 ahead of BOE rate decision.GBP/USD is trading around 1.3200 as investors wait for the Bank of England (BOE) to announce its policy decisions. BOE is up for the third consecutive rate-hike to tame inflation. Meanwhile, the US dollar and Treasury yields fail to capitalize on the hawkish Fed outcome. 

GBP/USD News

EUR/USD remains pressured below 1.1050 amid cautious optimism.EUR/USD is off the weekly high, trading below 1.1050 amid a cautiously optimistic market mood. The US dollar drops with the Treasury yields, in the aftermath of the hawkish Fed decision, keeping the downside cushioned. Lagarde, Russia-Ukraine peace talks in focus. 

EUR/USD News

Gold recovers further from monthly low, upside potential seems limited

Gold recovers further from monthly low, upside potential seems limited

Gold gained traction for the second successive day and recovered further from the monthly low. Retreating US bond yields weighed on the USD and benefitted the non-yielding yellow metal.

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