Gold Prices Rebound After Three Weeks of Losses
On the global market, gold per ounce is gearing up to break its consecutive three-week decline. The yellow metal found some breathing room following the decrease in the dollar and bond yields after the Fed's interest rate decision. As we approach the last trading day of the week, all eyes are on critical levels.
Notable fluctuations in gold after the Fed's decision.
The most critical agenda item of the week for global markets was the interest rate decision taken by the US Federal Reserve (Fed) on September 16th. The Fed raised its policy rate by 25 basis points, moving it into the 3.754,00% range. The decision was unanimous and notably marked the first rate hike since 2023.
According to the projections published by the Fed, another rate increase is expected for the remainder of the year. However, the fact that the increase was largely priced in by markets in advance reduced uncertainty following the decision. Gold, although briefly pressured immediately after the decision, responded with a strong rally on Thursday.
In the US bond market, which is a key indicator for gold prices, there was a notable movement following the Fed decision. The 10-year US bond yield, which had risen above the 5% mark before the decision, fell back below this level following the decision and is currently hovering around 4.94%.
This decline in bond yields is seen as a positive signal for gold, which does not yield interest. Investors find it more attractive to turn to gold, seen as a safe haven, rather than bonds with falling yields.
The critical level for gold has been determined.
Should the upward trend continue, the first resistance level that the markets will be keeping an eye on stands out as $4,435. If the closing level of gold per ounce surpasses $4,349 on the final trading day of the week, it will be considered that the declining streak that has been ongoing for the past three weeks has come to an end. Meanwhile, domestically, the price of a gram of gold approached the threshold of 6,890 lira with a 1.30% increase during the day, while quarter gold traded at 11,265 lira, and half gold at 22,531 lira.
Will the gold price go up?
The volatility in the dollar index, which exerted pressure on gold throughout the week, has also weakened. The dollar, which appreciated immediately after the Fed decision, couldn't maintain its upward momentum on Thursday and is currently hovering just above the 100 level. The inability of the index to launch a new attack provided some relief for ounce gold, which is priced in dollars.
Developments in the oil market were also among the headlines affecting the course of gold. Brent oil, which approached the $110 limit at the beginning of the week due to developments in the Middle East and the impact of the interruption in Saudi Arabia's East-West oil pipeline, declined to around $104 with the expectation that the pipeline would be partially reactivated. This drop in energy costs strengthened the expectation that global inflation pressure would ease, thereby reducing concerns about the possibility of the Fed being forced to implement another interest rate hike.
(The statements in this content are not investment advice.)
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