FXStreet (Edinburgh) – In the opinion of analysts at BAML, sustained upside in the precious metal remains unlikely.
Key Quotes
“In our view, US monetary policy will remain a key gold price driver”.
“The upcoming rate hike (our base case is that the Fed will tighten in September) should make a sustained gold price rally unlikely in the coming weeks”.
“Of course, a higher US policy rate is also removing upside to gold through monetary policy differentials as aggressive easing by the ECB will likely keep pressure on the Euro”.
“Looking further out, we reinforce our view that gold can be supported even if the US central bank turns less accommodative, as long as the Fed just normalises monetary policy, but does not hike aggressively; rising inflation and hence muted upside to real rates would also help”.
(Market News Provided by FXstreet)