Commerzbank: Gold will recover as soon as rate hike uncertainties fade

Commerzbank: Gold will recover as soon as rate hike uncertainties fade

6 August 2015, 19:46
News
0
995

Analysts at Commerzbank suggest gold may be able to rally once the uncertainty of a Federal Reserve tightening diminishes. 

The U.S. dollar was boosted after comments from Atlanta Fed President Dennis Lockhart who noted that the U.S. economy was ready for an interest-rate liftoff, adding that drastically weak data is the only thing for him that would prevent him from voting for an increase in September.

Commerzbank commented that Lockhart so far represented the average view of Fed members.

The interview "is a strong indication that a rate hike will be forthcoming in September. The market responded by pricing in a rate hike in September with a likelihood of 50% for the first time this year."

In this environment, "gold is still holding its own relatively well at just shy of $1,090 per troy ounce. In euro terms, the firm U.S. currency has driven gold up to €1,000 per troy ounce."

Analysts at the bank therefore suggest that the price for the yellow metal will be pressured until the first rate increase. "The price should climb again just as soon as the uncertainty over the timing diminishes."

Share it with friends: