Gold's Q2 Strength Fades, Q3 Outlook Uncertain
Initially showing strength and the potential for new record highs, gold (XAU/USD) in the commodities market eventually faced a sell-off, resulting in a 2.5% decline over the second quarter. This decline was primarily driven by rising yields caused by a more hawkish stance from the Federal Reserve, which adjusted its monetary policy outlook due to persistent inflation and resilient economic activity.
Looking ahead to the third quarter, the investment landscape may become more challenging for certain assets. Equities could face pressure if the Federal Reserve fulfills its promise to tighten policy by an additional 50 basis points by the end of the year. An economy in the late stage of the business cycle would likely struggle to endure interest rates nearing 6.0% without adverse effects.
As for gold, it may experience continued weakness in the short term before stabilizing towards the end of the summer. Major central banks are expected to raise borrowing costs further in an attempt to curb inflation, which could lead to upward pressure on nominal and real interest rates. Consequently, non-yielding assets like gold and silver could be negatively impacted.
For more detailed insights into the behavior of major assets over the next three months, DailyFX's analysts and contributors offer fundamental and technical forecasts. To access comprehensive trading guides for specific markets, you can click on the download banner provided in each of the accompanying articles.
XAUUSD SELL 1920 - 1922💯💯
✅ TP1: 1915
✅ TP2: 1910
🛑 SL: 1926
Looking ahead to the third quarter, the investment landscape may become more challenging for certain assets. Equities could face pressure if the Federal Reserve fulfills its promise to tighten policy by an additional 50 basis points by the end of the year. An economy in the late stage of the business cycle would likely struggle to endure interest rates nearing 6.0% without adverse effects.
As for gold, it may experience continued weakness in the short term before stabilizing towards the end of the summer. Major central banks are expected to raise borrowing costs further in an attempt to curb inflation, which could lead to upward pressure on nominal and real interest rates. Consequently, non-yielding assets like gold and silver could be negatively impacted.
For more detailed insights into the behavior of major assets over the next three months, DailyFX's analysts and contributors offer fundamental and technical forecasts. To access comprehensive trading guides for specific markets, you can click on the download banner provided in each of the accompanying articles.
XAUUSD SELL 1920 - 1922💯💯✅ TP1: 1915
✅ TP2: 1910
🛑 SL: 1926
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