Important warning to gold investors! – Latest news
Milliyet.com.tr/ The safe haven of investment gold is breaking record after record. Inflation figures in the USA will be announced today? So what will be the direction under the critical data post? Here are the details…
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In his statement on the subject, Ata Yatirim Treasury Manager Yalaz Özkanlı said: “As of the end of last week, we observed that the VIX volatility index decreased to the level of 18.5. This decline means that the concern about the bankruptcies in the US banking sector in global markets has largely left its place to a normal course. Again, after the US non-farm employment data announced last Friday, which came in line with the expectations, we see that gold prices are looking for a direction around the $2,000 level at the beginning of the new week.
“MANY DATA WILL BE ANNOUNCED THIS WEEK”
This week, many data that may be decisive for gold prices in the US will be announced: CPI inflation and Fed meeting minutes on Wednesday, followed by PPI inflation on Thursday, retail sales and first quarter company financials on Friday. Although each item is very important in terms of gold prices in this intense data flow, the US inflation data stands out as the most determinant. In the event that a headline and core inflation data are announced above the expectations, a tighter monetary policy for the USA may be priced, thus a rise in the yield curve and an appreciation of the dollar. A strong dollar scenario will be negative for gold prices. In the opposite scenario, a low future inflation data will strengthen the market’s interest rate cut expectations and increase the pressure of depreciation in the dollar and will be supportive for gold prices.
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It is observed that the US monetary policy forecasts of financial institutions have started to diverge somewhat recently. In the expectations surveys, we still follow the scenario that the Fed will increase the interest rate by 25 basis points in the coming months, reduce the policy rate to the level of 5.00-5.25, and gradually start interest rate cuts in the second half of the year. New York Fed President John Williams’ statement that following a 25 basis point interest rate hike in May would be a good starting point to act on data, gives an important insight into the Fed’s stance. Contrary to expectations, if the Fed does not raise interest rates at its May meeting, it can be expected that this will cause a depreciation in the dollar and support gold prices. On the other hand, whether interest rate cuts will take place in the second half of the year will remain largely dependent on inflation and growth data.
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IMPORTANT NOTICE TO GOLD INVESTORS!
Dynamic Investment Securities Research Specialist Ceyhun Yavaş used the following statements in his statement: “The low trading volumes due to Easter, the average hourly earnings from the non-farm employment data and the accompanying macro data, and the unemployment rate point to a strong employment in the USA, and in the light of these developments. We are of the opinion that before the Fed’s meeting on May 3, rate hike expectations are shaped by 25 basis points with 75% probability.
HOW ARE PRICES FORM?
US inflation plays an active role in shaping the Fed’s monetary policies. Inflation data for March, which will be announced today, is expected to decline from 6% to 5.2% on the headline side. Core inflation is expected to increase from 5.5% to 5.6%. The market will be watching whether the stiffness continues in the sub-indices rather than the decrease in the inflation rate. We are of the opinion that if inflation data are announced above expectations, interest rate hike expectations for the Fed will increase. In this scenario, pressure may occur in gold and commodity prices, while value gains may occur in dollar-based assets. In an opposite scenario, we may see value gains in gold and commodity prices and pressure in dollar-based assets.
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ABOUT FED INTEREST DECISION
We are of the opinion that the Fed may increase interest rates by 25 basis points for the last time and that the risk of a recession in the USA is not as close as it seems. If the Fed does not raise interest rates, that is, if it passes, we can see value gains in the gold and commodity groups.”
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Artificial intelligence has reinterpreted this news for you.
The article discusses the impact of upcoming inflation data in the USA on gold prices. The article mentions that a strong inflation reading could lead to a tighter monetary policy, which could lead to a rise in the yield curve and an appreciation of the dollar, negatively impacting gold prices. On the other hand, a low inflation reading could lead to interest rate cuts and a depreciation in the dollar, which could be supportive for gold prices. The Fed’s interest rate decision is also discussed, with the possibility of a 25 basis point interest rate hike being mentioned. The article advises gold investors to pay attention to the upcoming inflation data and the Fed’s decision.
