Bank of Taiwan Flags Competing Forces in Gold Outlook This Week
Market analysts at Bank of Taiwan expect gold prices to face competing pressures this week as various factors continue to influence the precious metals market. Gold has been trading within a narrow range since late June, hovering around NT$132,481 (US$4,100) per troy ounce. The bank's Precious Metals Department points out that Middle East tensions, oil-driven inflation concerns, and the US Federal Reserve's interest rate decision will all impact gold prices this week.
The bank notes that if oil prices remain above US$100 per barrel, gold could test its previous low of around US$3,950 per troy ounce. Additionally, a more hawkish stance from the Fed or a more cautious approach toward interest rate cuts than markets expect could weigh on gold prices.
However, the bank suggests that a pause in US military action against Iran ahead of the Fed meeting could ease concerns over renewed inflationary pressure and lower oil prices, supporting gold. The Precious Metals Department also points out that factors supporting gold prices include China's physical gold purchases exceeding market expectations, under-control US inflation indicators, and gold's long-term upward trend remaining intact.