Critical Drop Warning for the Gold Market from Economist Hikmet Baydar
Stating that the rises in gold are speculative, experts noted that sales could accelerate if the $4,571 level is broken.
While financial markets turn their attention to statements coming from the US, a critical threshold for gold prices has also come to the agenda. Economist Hikmet Baydar stated that the recent rises stemmed from speculative movements rather than a permanent trend, warning investors against potential sharp declines.
Expectations in Global Markets
While global markets are locked on Fed Chair Warsh, all eyes have turned to the Jackson Hole meetings. It is stated that the vibrancy in the US economy strengthens expectations for a rate hike.
Interest Rate Policies and Pricing
Markets are predominantly pricing in keeping interest rates steady in September and a 25 basis point hike in October. Statements from the Fed that deviate from expectations could create volatility.
Emphasis on Speculative Rise
It is stated that recent movements in gold are fundamentally driven by speculative position changes in money markets. Funds shifting towards gold instead of the dollar have driven prices upward.
Critical Threshold and Selling Pressure
It is emphasized that the critical level for gold is $4,571, and if this level is broken, selling pressure could strengthen. In this scenario, there is a risk that prices may pull back to the $4,440-$4,450 band.