Gold Prediction Will Move Unstable This Week
- 2023-02-13
- Posted by: Widyadhana Mufida
- Categories: Commodities, News
Gold movement is predicted to be unstable this week. This prediction happen because investors are waiting for the United States of America (USA) inflation data. The price of gold can be threatened to drop dramatically if inflation is above market expectations. Currently the price of gold is in the position of USD 1,864.43 per troy ounce or sloping by 0.02% (13/02/2023).
According to cnbcindonesia.com, this weakening was inversely proportional to the close on 10th February 2023. The price of gold at that time slightly strengthened at USD 1,864.67 per troy ounce. The USA will release the inflation data for January 2023 on 14th February 2023.
Market players expect inflation to ease between 6-6.2% (year on year/yoy) last month. Previously, in December 2022 inflation was at 6.5% (yoy).
The announcement of inflation is very important because the market perceives that there are differences in the views of officials from the US Federal Reserve (The Fed), regarding the current inflation. Fed Chairman Jerome Powell sees signs of disinflation. Meanwhile, a number of other officials, such as Thomas Barkin, see that the task of inflation is far from over. If inflation weakens, the Fed has more room to loosen monetary policy.
“We need an important catalyst for gold activity this week, namely inflation. If inflation is as expected, then there will be no shock to the price of gold,” said Kitco News analyst Daniel Ghali as quoted from Kitco News.
Ghali and a number of market analysts estimate that gold will move in the range of USD 1,800 – 1,855 per troy ounce this week.
“We expect inflation to be lower than consensus. So commodity prices will rise. Lower inflation eases market worries that the Fed will return to being hawkish,” said Capital Economics analyst, quoted from FX Street.
If the Fed loosens its monetary policy, the USD could be under pressure because more and more traders and investors are selling it. This condition certainly has a sweet impact on gold because gold is getting cheaper so the demand goes up.