XAU/USD unlikely to leave its trading range – Commerzbank

Share:

Gold price is treading water while defending the $2,030 level. Economists at Commerbznka analyze the yellow metal’s outlook.

Optimism for rapid interest rate cuts only to return if inflation surprises to the downside

The direction of the Gold market has long been driven by expectations of US interest rate policy. At present, these are still very much determined by Fed Chairman Powell’s indication that inflation must first fall sustainably before interest rates can be cut. 

The next litmus test will be next Tuesday when the US inflation data for January is published. However, optimism for rapid interest rate cuts is only likely to return if the figures surprise to the downside. We do not expect this to happen: Gold is therefore unlikely to leave its trading range between a good $2,050 and $2,000.