Gold Price Prediction: What Next For the Precious Metal?
The price of gold dipped on Monday as the U.S. dollar strengthened on higher Treasury yields. The DXY index, which tracks the performance of the U.S. dollar shows the currency reaching 105.50 on Monday. A stronger U.S. dollar is pulling gold prices down making it fall to the $2,315 mark.
Now that the price of gold is heading south, will the precious metal reverse the tides and begin to rally? In this article, we will highlight the prospects of what’s next for the price of gold.
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Gold Price Forecast: What’s Next?
Investors are waiting for more U.S. data and comments from the Federal Reserve before taking an entry position into gold. Therefore, the U.S. dollar will have an upper hand before the next CPI data and interest rate hike is revised. “There’s really a lack of major fresh fundamental news, so the gold market is looking to the outside markets for direction,” said Jim Wyckoff, Senior Market Analyst at Kitco Metals.
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Wyckoff predicted that gold prices would move sideways and could be locked between $2,300 to $2,400. Going above the $2,400 mark could be a herculean task for the precious metal, he forecasted. “Gold prices are probably going to grind sideways between $2,300 and $2,400 until the next major fundamental catalyst occurs, which may not occur until sometime in July,” he said.
The Federal Reserve cutting down on interest rates could also boost gold prices in the coming months. However, no data points towards the Feds initiating rate cuts currently. “Plenty of uncertainty remains regarding the timing of expected cuts, and macro positioning’s beta to data surprises will remain elevated in the near term,” said Ryan McKay, Senior Commodity Strategist at TD Securities.
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In conclusion, the price of gold remains on a slippery slope while the U.S. dollar gains strength in the markets. Read here to know how high the U.S. dollar could trade by the end of 2024.