The Fed’s global central bank cut interest rate, coupled with the deterioration of the Sino-US trade war, made gold a big winner this year
Analysts believe that the price of gold is expected to rise to the next level, especially if the Reserve Bureau cuts interest rates by half a percentage this time.
Although gold was once regarded as the most relevant asset in the US dollar, it is different from the US dollar index this year. The price of gold has risen more and more this year, rising 11%. Last week, it rewritten a six-year high to $1,453. At 0:00 this morning, the spot gold price rose by 0.1% to US$1,427.
If the interest rate is cut by 1/4%, test 1400
Ryan McKay, commodities strategist at TD Securities, said that if the interest rate cuts by 0.25% in July, the price of gold may be slightly lower, as some investors still expect the reserve to cut interest rates by half a percentage point.
However, he believes that the slight decline in the price of gold is a good opportunity to absorb the low, because the global central bank began to turn to the loose monetary policy cycle to support the gold price.
Charlie Nedoss, senior market strategist at LaSalle Futures Group, estimates that the price cut of 0.25% will be implemented, and the gold price may take the opportunity to test the important support level of $1,400.
If you cut interest rates by half a cent, you will challenge 1454
However, if the interest rate cut in July is half a cent, Nedos expects the price of gold to rise to the range of 1,440 to 1,454 US dollars, which is up to 2% higher than the current level.
He pointed out that the stage in which the global central bank is in a loose cycle will be the key to affecting the price of gold. If the market originally thought that the Reserve Bureau would only cut interest rates once this year, then the change of ideas would be expected to cut interest rates three times.