Although gold may experience some short-term selling pressure, it is mostly dependent on the September CPI inflation rate, which will be released on October 13th, 2022
The spot gold price finished at $1694.79 on Friday, slowly rising from its slump in the last weeks of September. The 52-week high for gold is $2,070.13, while the 52-week low is $1,615.05. This week's gold prices were influenced by a variety of variables. Let us clarify these variables and help you comprehend the full picture of gold.
Despite the market's high level of uncertainty, the gold market has performed well. Gold has long been seen as a hedge against inflation due to its low, and even negative, correlation with equities and markets, and it may also be the ideal asset in diversification.
While markets reacted to US jobs report, it is crucial to remember that unemployment rates are a lagging indicator of how the economy is performing in the short term since the impacts of interest rates take nine to 18 months to filter through the economy.
Gold is frequently referred to be the "safe haven" amid periods of high volatility. Even during the current covid 19 pandemics sell-off, from February 1 to April 1 in 2020, the S&P 500 fell 23% while gold fell less than 0.1%. Even though gold has been trading sideways for over two years, growth and a high are on the horizon. Central banks and investment demand will be the driving forces behind the next gold rush.
Although gold may experience some short-term selling pressure, it is mostly dependent on the September CPI inflation rate, which will be released on October 13th, 2022. This will have an impact on the Federal Reserve's interest rate and, as a result, the price of gold. The spike in the US dollar can also be a big headwind for several assets, including gold, and can play a significant influence in determining asset prices in 2022.According to some analysts, gold will be strongly supported by excellent fundamentals and will show a positive high in the near future. Despite the volatility of the markets, long-term investors remain optimistic about the coming months. The gold market is preparing for a resurgence, and it provides fantastic opportunities for retail investors to invest in the markets via gold stocks and gold mining ETFs. Retail investors should consider gold as an excellent way to hedge against inflation as well as a way to diversify their portfolio.