The gold trading market found buyers at the $1,800 level last week as traders looked for a bottom in the precious metal.
Gold – Weekly Chart
Gold prices rallied $56 on the week to close at $1,856, and that could be the platform to retest the recent highs above $1,900.
Commerzbank analysts believe the price of gold has now bottomed.
“Weighing on Gold was a combination of an appreciating USD and sharply rising bond yields due to a massive upward correction of US interest rate expectations.”
Gold Is Expected To Soar Over Oncoming Weeks
“By the end of the month, the expected rate peak had been pushed back into the autumn – what is more, it is now set to total almost 5.5%, which is around 70 bps higher than envisaged at the start of the month. Moreover, there is no longer any expectation of rate cuts this year.”
“The price increase seen this week despite even higher interest rate expectations could indicate that the correction of the gold price is more or less complete and that the price may have bottomed out at the beginning of the week,” analysts added.
Comments from Federal Reserve Chair Jerome Powell in the middle of the week may drive prices. The next target will be Friday’s Non-Farm Payrolls number on Friday. That could give gold some room to move higher earlier in the week.
Central banks have been big buyers of gold over the last year, with Turkey and China leading the way. The largest gold buyer in January was Turkey, which was also the largest buyer of gold in 2022, with its reserves now at 565t. China added 15t to its gold reserves in January, currently at 2,025t.
