The correction of the Gold price has been pronounced, and investors on the Gold market are likely to remain hesitant after the price dip. This is according to strategists at Commerzbank, who have lowered their forecast of the mid-year Gold price to $1,800 due to the Federal Reserve’s steeper rate hikes.
Initially, the strategists at Commerzbank had expected the rate hikes to end in the near future, but this has turned out to be premature. Consequently, the price of a troy ounce of Gold has dropped by a good $130 since the beginning of the month, leaving many investors with burnt fingers.
The strategists at Commerzbank now expect the US interest rate to peak at 5.5%, and as such, have lowered their forecast of the mid-year Gold price to $1,800 (previously $1,850). Despite this, they are still expecting a lasting recovery in the second half of the year, as the US economy is likely to experience a dip that will spark renewed expectations of rate cuts. As a result, they are sticking with their year-end forecast of $1,950.
The correction of the Gold price has been a significant development in the market, and it has sparked a great deal of uncertainty amongst investors. This is largely due to the fact that the Federal Reserve’s rate hikes have been steeper than initially expected, and this has had a direct impact on the Gold price.
The strategists at Commerzbank have responded to this by lowering their forecast of the mid-year Gold price to $1,800, and they are expecting the US economy to experience a dip in the second half of the year that will spark renewed expectations of rate cuts. However, they are still expecting a recovery in the price of Gold, and are sticking with their year-end forecast of $1,950.
Overall, the correction of the Gold price has been a significant development in the market, and it has caused a great deal of uncertainty amongst investors. The strategists at Commerzbank have responded to this by lowering their forecast of the mid-year Gold price to $1,800, and they are expecting the US economy to experience a dip in the second half of the year that will spark renewed expectations of rate cuts. Despite this, they are still expecting a recovery in the price of Gold, and are sticking with their year-end forecast of $1,950. As such, it remains to be seen how the Gold market will ultimately respond to the correction of the Gold price, and whether the strategists at Commerzbank’s forecast will come to fruition.
