Estimated gold price: XAU / USD remains in defensive, downside seems soft

Lower-edged gold on Thursday and for now, seems to have taken a six-day victory to one month highs, around $ 1,981- $ 1,982 the area touched the day before. Risk impulses – as described by positive tones that are generally around the equity market – it turns out to be a key factor that damages XAU / USD safe-haven. Apart from this, it strengthens the hope that the Fed will tighten monetary policy at a faster speed to combat very high inflation acting as a highlight for yellow metals that do not produce.

Fed officials have opened the door to a 50-bps interest rate increase at his May meeting, while moving 94% chances of lift 0.50% to the Federal Fund (FFR) level. The bet was reaffirmed by the release of Wednesday from the US producer price index, which showed that there was a pipe fee that could put pressure on high inflation. Add to this, Fed Governor Christopher Waller said that data supports 50 BPS increases, and he prefers aggressive front-load load at May meetings and maybe more in June and July. He stated that he wanted to get a neutral above half this year.

The disadvantage, however, remains soft in the middle of the US dollar pullback further than the highest level since May 2020, which tends to benefit commodities in the dollar. Apart from this, geopolitics, with the latest updates about the Russo-Ukrainian war showed that peace remained further than expected, could further encourage heaven to gold. Russian Deputy Foreign Minister said on Wednesday that they would see us and NATO vehicles carry weapons in the Ukrainian region as a legitimate military target. This came after Putin’s comments on Tuesday, said that peace talks with Ukraine had reached a dead end.

 Instead, Putin promised that Russia would reach all the purposes of “noble” in Ukraine. “We returned back to the situation of a dead end for us,” Putin told the news direction during a visit to Voschny Cosmodrome 3,450 miles (5,550 km) East Moscow. “We don’t mean to be isolated,” Putin added. “It’s impossible to isolate anyone in the modern world – especially a wide country like Russia.”

The main geopolitical headline has hopes for each diplomatic solution to end the war in Ukraine. In addition, concerns about the potential of the economic downfall of the Ukrainian crisis, along with inflation fear, must continue to encourage gold appeal as a hedging for price increases. The fundamental background seems to be tilted strongly supporting bullish traders, although the lack of follow-up purchases guarantees some carefully before positioning further profits.

Meanwhile, analysts at TD Securities explained that gold benefited from large-scale Chinese purchases, “because of our tracking from the aggregate clean position held by the largest traders of Shanghai long and short shows that this cohort has increased their gold length at the highest level of twelve last month. “

Meanwhile, analysts also explained that the ” Comex ring has been mostly removed and the ETF’s entry flow has slowed when the trafficking fear subsides. However, a Fed that indicates its intention to achieve neutrality at the end of the year and to start an aggressive QT regime does not really stand out as a macro context in which gold inflows are expected to be firm. “

“In turn, good gold bugs are walking towards significant withdrawals because the inflows together with a larger short position, or resilience in prices are walnuts in coal mines for different macro regimes on the horizon. “

harry

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