Gold suffers heavy sell-off! Goldman Sachs and Citigroup both lower gold price targets
Original Title: Gold Faces Aggressive Sell-off! Goldman Sachs’ Latest Forecast: Significant Downward Revision
Gold continues to adjust.
Earlier, Citigroup issued a warning in a research note, lowering its three-month gold price target from $4,300 to $4,000 per ounce, citing persistent tensions in the Strait of Hormuz and high energy prices fueling market expectations for a Fed rate hike this year. The institution also warned that if the blockade at the Strait of Hormuz continues until late summer, gold prices could fall to $3,500 per ounce. This marks the second time in a month that Citigroup has adjusted its gold price forecast.
On the news front, the first Federal Reserve interest rate meeting chaired by new Fed Chair Kevin Walsh took a surprisingly “hawkish” stance, with all nine FOMC members expecting a rate hike this year. “Persistently high prices have placed a heavy burden on Americans, but the current inflationary situation will not become the long-term norm,” Walsh stated at a press conference. “This committee will definitely achieve the goal of price stability.”
Gold is a non-interest-bearing asset; as market interest rates rise, the opportunity cost of holding gold increases. Interest rate market pricing shows that the window for a Fed rate hike has moved up significantly from December before the meeting to September this year.
Sources: Market Information, Yicai Global
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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