{"id":3423,"date":"2023-10-09T07:32:00","date_gmt":"2023-10-09T07:32:00","guid":{"rendered":"https:\/\/ceo.com.pl\/en\/?p=3423"},"modified":"2023-10-09T07:37:36","modified_gmt":"2023-10-09T07:37:36","slug":"gold-under-pressure-but-not-for-long-66481","status":"publish","type":"post","link":"https:\/\/ceo.com.pl\/en\/gold-under-pressure-but-not-for-long-66481\/","title":{"rendered":"Gold under pressure, but not for long"},"content":{"rendered":"

The price of gold continues to be under pressure from a strong dollar and high returns on US bonds due to the Federal Reserve’s stance. The motto of “higher for longer” is a call to maintain interest rates at their current level for an extended period of time. The National Bank of Poland (NBP) has no dilemmas and is slashing rates amid significantly higher inflation.<\/p>\n

The gold price quoted in the US dollar has reached levels last seen in March of this year, hovering in recent days around $1,820 per ounce.<\/p>\n

The Federal Reserve and its “higher for longer” campaign, which pledges to keep interest rates at current (or higher) levels for an extended period, are responsible for this state of affairs. Real interest rates in the USA are currently positive (exceeding inflation), which strengthens the dollar, increases bond yields, making bonds and bank deposits more attractive for many market players compared to gold.<\/p>\n

However, not for everyone \u2013 the low price of gold attracts those who use gold as a safe haven and as a way of storing value regardless of market conditions. Demand stays high.<\/p>\n

There are therefore two things worth noting: gold is currently heavily oversold, and despite the Fed’s “higher for longer” stance, it will not be able to maintain interest rates at such a high level for an extended period of time due to, among other things, public debt. Sooner or later it will have to cut.<\/p>\n

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