- Gold and Silver on the backfoot as long as correction in rate cut expectations continues – Commerzbank
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Gold and Silver on the backfoot as long as correction in rate cut expectations continues – Commerzbank
Gold price fell almost to the $2,000 mark this week, its lowest level in more than a month. Economists at Commerzbank analyze the yellow metal’s outlook.
Correction of interest rate cut expectations puts Gold and Silver under pressure
Better-than-expected US data on retail sales, industrial production and the real estate market led to a noticeable reduction in Fed rate cut expectations. According to Fed Fund Futures, a rate cut in March is now only expected with a probability of just over 50%. The interest rate cuts expected for the first half of the year were revised downwards by around 20 bps over the course of the week. As a result, US bond yields rose significantly and the USD appreciated. All of this acted as a headwind for Gold.
The price of Silver came under even greater pressure than Gold. It fell to a two-month low of $22.4, pushing the Gold/Silver ratio back up to almost 90.
As long as the correction in interest rate cut expectations continues, Gold and Silver are likely to remain on the backfoot.
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