Gold Defies Hike: Wall Street Remains Bullish Amid Central Bank Purchases and Fiscal Concerns
The Federal Reserve's latest interest rate hike has sent shockwaves through financial markets, but surprisingly, it hasn't deterred Wall Street from its bullish stance on gold.
Despite a 0.9% decline in price to $4,338 an ounce, several institutions have reaffirmed their forecasts and targets for the precious metal. UniCredit, for instance, still sees gold reaching $4,300-$5,000 by the end of 2026.
The bank's reasoning is based on three key factors: central bank purchases, ETF inflows, and concerns over preserving purchasing power amid large fiscal deficits. However, they acknowledge that higher interest rates limit how far demand can push prices.
Deutsche Bank's metals desk has mapped the algorithmic trading landscape, identifying two critical levels for gold: $4,300 and $4,700. Gold has held above the lower trigger despite a Fed hike, firmer dollar, and rising short-term yields.