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The Fed Calls Investors Lazy! Gold Price Finally Slopes

The Fed Calls Investors Lazy! Gold Price Finally Slopes

Andrianus.my.id - The euphoria of rising gold prices is starting to subside. Gold slumped after officials of the central bank of the United States (US) or The Federal Reserve (The Fed) again sent signals of continuation of their hawkish policies .

On trading Tuesday (15/11/2022) at 06:32 WIB, the world gold price on the spot market fell 0.1% to the position of US$ 1,770.02 per troy ounce.

This weakening ended the positive trend of gold that had been going on since last Thursday or the last three days. On Monday (11/14/2022), gold prices rose slightly by 0.06% to US$ 1,771.8 per troy ounce.

Within a week, the price of gold still strengthened 3.4% point to point. In a month, the price of gold also jumped 7.8% while in a year it fell 5%.

Fed Governor Christopher Waller said investors were overreacting, aka overreacting to last week's weak inflation data. He said the market should be prepared for further rate hikes.

For the record, US inflation eased to 7.7% ( year on year / yoy) in October from 8.2% in September. Softening inflation has made the market expect the Fed to ease monetary policy soon.

Waller's hawkish statement immediately boosted the US dollar. The dollar index rose 0.35% to 106.66 yesterday.

"Gold is expected to weaken until the end of the year. The Fed's hawkish policy statement confirms that the central bank will continue to raise interest rates to bring inflation to their target. Inflation data does not seem to be enough to make the Fed start easing policy next summer," said analyst from UBS Giovanni . Staunovo, quoted by Reuters.

Staunovo even estimates that metal prices, such as gold, will continue to be depressed in the short term.

OANDA analyst Edward Moya said that although gold is expected to weaken in the short term, the gold support point is still quite high. Gold is also still likely to strengthen to the psychological level of US $ 1,800 per troy ounce.

"The gold resistance point is now at the level of US $ 1,800 and the support point is at US $ 1,750," said Moya.

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