Gold price could rebound as long rates fall

The next economic data will be decisive for the price of gold

The price of gold could regain height in the short term as it returns to test key support at $1730 and bond rates could continue to fall. Long-term rates have been falling since the end of October and could continue in this direction over the coming months given the growing fears of recession. Indeed, the risk of a global recession continues to increase with the real estate crisis and the extension of health restrictions in China, the energy crisis in Europe and the tightening of financial conditions around the world.

Upcoming inflation and growth data will be crucial for the price of gold. Paradoxically, despite its inflation protection, the price of gold would be impacted by higher than expected inflation figures, as they would increase the chances of an even more aggressive tightening from the Fed. However, the price of gold could benefit from the deterioration in fundamentals, the growing risk of recession would push investors back into the bond market, which would lower bond rates and increase the chances of a “pivot” from the Fed. .

Upcoming speeches by Fed members will also be one to watch, but any of them are unlikely to cause a major move in markets before Powell speaks at the Brookings Institute on Nov. 30.

Gold Price Daily Chart – Key Levels


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