Gold stays calm under pressure from Fed
According to the ABC Bullion, for the Friday 24 June 2022 week end, they said, gold stays calm under pressure from Fed. ABC Bullion said for the week's market report; gold holds its ground: Gold is down overall this week, lower by 0.66% to US$1,822. Despite falling, Au is holding its ground against the Federal Reserve Bank’s warnings of further aggressive rate hikes.
100 basis point hike ahead? Fed chair Jerome Powell refused to rule out a 100 basis point hike at future Fed meetings. If there is a 1% increase at a FOMC, it’s highly likely it will be leaked to the market in days before as happened with the recent 0.75% jump.
Terminal rate expectations are still 4% in 2023. With inflation prints running above 8% it’s unlikely the Fed will control inflation if the terminal rate only reaches here. Odds of a US recession increase: The Fed’s house view is a US recession is ‘possible, but not likely’, whereas one Fed insider, says it is closer to a 75% chance of a US recession.
Palladium up, but other precious metals fall: Palladium has eked out a small gain this week, with both silver and platinum falling more than 4%. The week end summary, as the month’s last week, 1: Silver dropped 4.94% to US$20.86, 2: Platinum is lower by 4.06% to US$909, 3: Palladium rose by 0.18% to US$1,840.
Bulls, gold is close to support: Spot gold has held up well with threats of aggressive increases in the background. Nearby support around US$1,805-09 is likely to be tested over the next week. Bears, below US$1,800 is possible: A fall below US$1,800 is increasingly likely. If support breaks, Au is likely to fall into the US$1,780-88 range.
Australian dollar gold price is steady: The Australian dollar gold price remains steady at AU$2,638 this week, with its falls buffered by bigger declines in the Australian dollar, down 2% to 68.94 US cents.
Commodities fall on recession fears! Silver dive on slowing growth! Base metals connected with economic growth have fallen this week, as central bankers signal more aggressive rate hikes are coming.