Gold prices have been volatile recently, driven by a combination of factors. On the positive side for gold, global economic uncertainty and geopolitical tensions remain elevated.
Russia‘s invasion of Ukraine and unrest in certain areas of the middle east continues to generate spikes in gold prices as investors seek safe haven assets.
High Us interest rates and a hawkish stance by the Federal reserve also supports gold prices as investors look to hedge against rising prices.
On the negative side, an aggressive Fed tightening cycle has strengthened the US dollar and bond yields, creating headwinds for gold. The Fed is widely expected to continue raising interest rates over the next coming months, which could limit gains for the non-yielding commodity.
Overall, conflicting forces are impacting gold prices right now. On balance, lingering geopolitical instability and high inflation should provide support over the next week.
However, further Fed rate hikes and dollar strength could cap major upside moves. Look for gold to trade in a range between $2,040 – $2,070 per ounce over the next couple of weeks, barring any unexpected shocks to the economy or financial markets.
