Gold shows roller coaster trend after breaking 1800

Spot gold closed at US$1797.01 per ounce, up US$5.35 or 0.30%. The highest intraday hit US$1815.05 per ounce, the highest level since June 17, but it soon fell back by US$25 from the high to a daily low of 1790.01. US dollars per ounce.

COMEX August gold futures closed up 0.60%, at 1,794.20 US dollars per ounce.

The benchmark U.S. Treasury bond yield hit a nearly two-week low, boosting the attractiveness of gold because it tends to reduce the opportunity cost of gold.

ThinkMarkets analyst Fawad Razaqzada said: "In the past few days, we have seen that central banks are dispelling the idea of premature interest rate hikes."

"Investors are realizing that monetary policy will remain at a historically very easy level, which is one of the reasons for the decline in U.S. Treasury yields, which will help stabilize gold prices after the sharp decline in June," Razaqzada said.

The focus of the market’s attention is on the Fed’s latest meeting minutes to be announced on Wednesday local time. Prior to this, the Fed’s meeting last month had a hawkish tone. Policymakers are expected to start raising interest rates in 2023, which prompted the price of gold to fall below $1,800.

Data released last Friday showed that after the rise in the unemployment rate in the United States, the price of gold regained some of its lost ground.

TD Securities said in a report, “We believe that precious metals are still resilient, because inflation should be temporary, which means that the market’s pricing of the Fed’s policy is too hawkish.”

"Since the price of gold has successfully maintained an upward trend, this situation may eventually prompt the return of institutional investors, and the price of gold may remain firm above US$1,900."

Goldman Sachs: Gold price will reach up to $2500 

In view of the significant increase in the price of gold, Goldman Sachs believes that gold is a "good strategic purchase" for investment managers who want to hedge their tail risks.

In addition, whether the Fed is not responding to rising inflation and the global economic slowdown is also one of the potential factors for the rise in gold prices. Goldman Sachs said this situation will prompt investors to switch to more defensive assets.

Goldman Sachs said: "In our view, this means that gold can outperform cryptocurrencies, and we think it can better hedge against inflation risks. Overall, we believe that cryptocurrencies are far from becoming a defensive long-term store of value like gold. tool."

However, if the global economy continues to recover and inflation remains moderate, Goldman Sachs expects that the price of gold will only hit US$2,000, a potential upside of 10% from the current level. The price of gold has fallen 4% so far this year.

Goldman Sachs concluded: "Ultimately, the global economy is still shrouded in many uncertainties. Therefore, for portfolio managers who want to hedge the tail risks of macro volatility, gold may be a good strategic purchase."