Gold price is under pressure amid dwindling rate cut expectations. Nonetheless, economists at Commerzbank see only limited further downside potential.
Development of physical demand in Asia is hardly likely to influence prices
“Hopes of any rate cuts in the US in the near future have been dampened this week, thereby weighing on the Gold price. A new US labour market report will be published at the end of next week. If it shows a further cooling, as many observers anticipate, this would likely reduce rate expectations, especially if a compromise were to be reached in the US debt dispute, allowing economic indicators to determine the interest rate trajectory again.”
“By contrast, the development of physical demand in Asia, as evidenced by Swiss Gold exports and Chinese Gold imports from Hong Kong, is hardly likely to influence prices, especially as exports and imports will probably turn out to be somewhat weaker given the high price level.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Read More
Gold Price Forecast: XAU/USD downside potential is probably exhausted for now – Commerzbank
The gold market is always one of the most closely monitored and speculated areas in the finance industry. Its price can be incredibly unpredictable and subject to wild swings, so forecasting its movements can be tricky. But one stalwart in the gold market, Commerzbank AG, has released an analysis which has some interesting conclusions.
The latest forecast, delivered by Commerzbank this week, looks particularly bullish for gold. According to their analysts, they believe that the downside potential for the XAU/USD (gold compared against the US dollar) rate is now exhausted. This is significant as gold is traditionally seen as something to invest in when times are uncertain and the dollar weakens, but Commerzbank are suggesting there’s now more upside potential than downside.
Commerzbank also provided a target resistance level for the XAU/USD rate, which is $1910. They suggest this level is achievable over the next several weeks, so should gold be able to breach that then it could provide further significant upside potential.
The analysts at Commerzbank have attributed this positive outlook for gold on a range of factors, including the ongoing US-China trade tensions, receding global production, and an uncertain economic outlook across the globe.
Whilst Commerzbank’s gold forecast is most certainly an optimistic one, it’s important to remember that gold can be incredibly volatile and its price can move wildly and unpredictably. This ultimately means that although Commerzbank might think the XAU/USD rate has downside potential exhausted, another analyst could see a different outcome.
Overall, Commerzbank are optimistic about gold and seem to think that the downward movements have been exhausted. That could prove to be a correct forecast, as gold could rise significantly if it can break through the $1910 resistance level.