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15.02.202313:17 Форекс анализи и прегледи: Precious metals prices to fall further

Exchange Rates 15.02.2023 analysis

The gold market continues to struggle as prices remain below $1,900 an ounce.

Exchange Rates 15.02.2023 analysis

And most likely, the decline in precious metals prices will continue in the first half of the year as the Federal Reserve continues to raise interest rates to reduce inflation.

There is also potential for prices to fall further as bond yields remain high and inflation pressures continue to decline.

Investor fears of a recession and volatile expectations of a potential rate cut in the second half of the year should keep gold prices from falling to multi-year lows.

At the start of the year, markets began to expect rate cuts by the end of the year; however, persistently high inflation is helping to change market expectations. CME's FedWatch tool shows that markets are pricing in a growing likelihood that the federal funds rate will exceed 5%, peaking around 5.50% by the end of the year.

On Tuesday, U.S. Department of Labor data showed that while inflation remains well above the Federal Reserve's 2% target, it has declined for the seventh straight month.

In January, the U.S. CPI rose 6.4% YoY, slightly below the 6.5% YoY growth in December. However, inflation eased from June's 40-year high of 9.1%.

Along with gold, there is downside potential for silver as the two remain highly correlated.

Exchange Rates 15.02.2023 analysis

According to Natixis, a French international investment banking financial group, gold prices will average $1,790 an ounce in 2023 and then rise to an average of $1,830 an ounce in 2024 when the Federal Reserve starts cutting rates.

Exchange Rates 15.02.2023 analysis

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