According to market analysts, the precious metal gold is officially in a bear market and prices could remain suppressed over the next few weeks. Moreover, while the macroeconomic backdrop has been gloomy, the popular safe haven asset has lost 17.50% in value against the U.S. dollar during the last four months.
TD Securities Market Analysts Say Fed Hikes Could Erode Gold’s Price
There’s no doubt that the cryptocurrency economy is experiencing a bearish downturn as some of the top digital currencies have lost anywhere between 65% to 90% in value. The well known safe haven and investment asset gold has also been dealing with a downturn, ever since the precious metal tapped an all-time high (ATH) at $2,074.60 for one ounce of fine gold on March 8, 2022. Gold is currently trading for $1,711 per ounce, as the asset has lost 17.50% over the course of 134 days.
According to Kitco’s Neils Christensen on July 18, analysts at TD Securities have said that gold has some pressure to deal with over the next few weeks. “Investors cut net length by a very large 6% of open interest (3 million oz) as it became very apparent that real rates on the short end of the curve will continue to increase and there was little chance of upside, as nominal policy rates jumped higher and inflation expectations eroded along with the pending economic slump,” the TD Securities market analysts wrote.
The Canadian investment bank and financial services provider added:
Continued Fed hikes and less economic activity should see gold length continue to erode, with prices also likely to remain under pressure in the weeks to come.
