Interest rate expectations are likely to continue driving the Gold price, strategists at Commerzbank report.
US economic data should be a key driver of the Gold price
The US economy grew by 2.4% on an annualised basis in the second quarter, and thus more sharply than expected. This means there is still little sign of the US Federal Reserve’s aggressive rate hikes, which in the market’s eyes increases the likelihood of a ‘soft landing’ for the US economy. This view was also boosted by the Fed, which abandoned its forecast of a US recession at its meeting on Wednesday, which saw it increase key rates by 25 bps as expected.
This is relevant to the Gold price in the sense that rate cuts in the foreseeable future will be noticeably less likely if no recession is forthcoming. The market’s rate cut expectations for the coming year are at this point, however, quite supportive for the precious metal. Consequently, US economic data are likely to be watched very carefully over the coming days and weeks and should therefore be a key driver of the Gold price.
