Latest situation under ounce, quarter and gram

After the US inflation data announced last week, sharp movements were observed in the markets; The most critical data of this week is the Fed’s interest rate decision, which will be announced on Wednesday. According to the messages from the Fed, the markets are expected to find direction. These messages will also be very important for gold. So, what happened in gold prices, which levels are critical, what are the possible scenarios? Seda Yalçınkaya, Integral Investment Research Manager, evaluated hurriyet.com.tr.

Senay Zeren

While the ounce price of gold started to decline after the US August inflation figures, which exceeded the expectations last week; It fell below the critical level of $ 1700 and saw the lowest level in about 13 months. Ounce gold started the new week in a downward trend. While many central banks have interest rate meetings in the new week; most importantly, it stands out as the US Federal Reserve’s (Fed) interest rate decision. The Fed’s interest rate decision and Fed Chairman Jerome Powell’s press conference are expected to have an impact on the markets.

FED CAN CHANGE BALANCES

The September meeting of the Federal Open Market Committee (FOMC), which determines the Fed’s monetary policy, will start tomorrow and conclude on Wednesday. The Fed’s interest rate decision will be announced on Wednesday at 21:00 Turkish time. President Powell’s speech, which will start at 21:30, will be of critical importance in terms of clues he can provide for the upcoming meetings.

Looking at the market pricing, it is considered certain that the Fed will raise interest rates by 75 basis points. In addition, after the inflation figures, although the probability of a 100 basis point rate hike remains low, it has started to rise.

Markets held their breath and focused on the Fed’s interest rate decision. After the decision, the direction of the markets; Risk appetite is expected to increase as uncertainty disappears. In case of messages suggesting that the Fed may tighten its monetary policy beyond expectations, the dollar will strengthen further in the world due to the safe-haven effect; It can be expected that the US bond yields will move upwards and gold prices will be suppressed by the reverse correlation effect.

GOLD PRICES CONTINUE TO LOSE VALUE

Gold fell to $1652 an ounce on Friday, hitting its lowest level since August 9, 2021. Moving under pressure in the new day, the yellow mine saw the highest $1680 and the lowest $1659; As of 13:38, it is moving at 1664 dollars, down 0.67 percent.

The gram price of gold fell to 971 TL on Friday, with the effect of the decrease in gold, the lowest level since July 21. Today, gram gold sees the highest level of 986.89 liras and the lowest level of 975.84 liras; As of 13:49, it is at the level of 978.69 liras, with a decrease of 0.47 percent. At the same time, quarter gold is sold for 1638 liras, and Republic gold for 6 thousand 737 liras.

HOW IS THE PRICE OF GRAM GOLD DETERMINED?

While calculating gold in ounce units in global markets, the change in gram gold price; It is determined over the price of an ounce of gold and the value of the dollar against the Turkish lira.

For example, while the ounce price of gold is rising; if the dollar rate remains stable against the Turkish lira, the price of gram gold rises, or while the price of ounce gold rises; If the dollar rate depreciates against the Turkish lira, then the price of gram gold will decrease.

UNDER OTENS THE SPINE LEVEL BREAK
Seda Yalçınkaya – Integral Investment Research Manager

Ounce gold accelerated its losses after the above-expected US CPI data last week and broke the strong support level that has been continuing since about the end of 2019. If it stays below the $1680 level, a long-term bearish trend can be seen below the ounce. The $1680 level was a horizontal spine value. For now, the decline seems to be limited at the $1660 level.

Global markets are focused on the Fed meeting this Wednesday. We do not expect the Fed to compromise on its hawkish stance. However, it can also avoid being an extra hawk and signaling that it will raise more interest rates in the coming period. Ultimately, it has to keep its monetary policy adjusted to further cooling or warming the economy, which it uses to deal with inflation. In short, the Fed’s job is difficult. If more hawkish statements are made at this meeting, the pressures in the global markets may increase even more.

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WE DON’T EXPECT A DISCOVERY TO CHANGE

At this meeting, the Fed will also announce projections for the US economy. In particular, it will be important where the CPI is expected to be formed. At 21:30, the market will be ready to price the signals from Fed Chairman Powell’s speech. We do not expect a change in discourse. However, if there is a change that the market will perceive differently, it will be included in the market pricing sensitively.

In summary, if we encounter a more hawkish Fed, it can be expected that gold ounce will regress towards the $ 1550 level in the coming period. On the other hand, if the Fed’s rhetoric softens, we can expect gold to hold above the $1680 level. Even if this situation happens, it seems like a more likely scenario that the increases under ounce will remain limited. In the short term, if there is no established course above the $1735 level, it will not be possible to talk about the start of an upward trend.

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Source: bigpara- GÜNDEM by bigpara.hurriyet.com.tr.

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