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Economists at Commerzbank analyze Gold price outlook ahead of the central bank meetings that are scheduled to take place next week.
Though it seems certain that the ECB will hike its rates again, it is unclear what interest rate decision will be taken by the Fed. The market sees the chance of another rate increase, whereas our economists still believe that interest rates have peaked in the US.
Yesterday’s weaker-than-expected ISM index for the service sector did sow some seeds of doubts on the market with respect to its rate hike expectation next week; all the same, it appears unlikely that it will be completely priced out again. The prospect of rising rates will presumably weigh on the Gold price until the meeting, in other words.
However, a more pronounced and lasting correction is then on the cards after the Fed’s interest rate decision – assuming our experts are right – because the market’s positioning would then turn out to have been too hawkish.
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