Weekly Gold Price Technical Analysis: Shares and Bullion Slide Amidst Fears of Further Rate Hikes

In a week packed with significant economic developments, the FED once again raised interest rates, while GDP surged to an impressive 2.4%, surpassing estimates. These figures provided more impetus for the FED to consider more aggressive rate increases.

Consumer spending, a major driver of U.S. economic growth, rose by 1.6% from April to June, bolstering the GDP along with corporate spending on equipment and structures. Despite high inflation and rising interest rates, the economy has displayed remarkable resilience this year, quelling talks of a recession until 2024. Some economists, including those at the Federal Reserve, even believe the U.S. may avoid a recession altogether.

Back in Australia, the likelihood of another interest rate hike is all but confirmed. With robust growth across various sectors and inflation yet to be fully controlled, Australia braces for more rate hikes before a potential pause, regardless of a change in RBA Governors.

Following the news from the U.S., most asset classes experienced declines. Interestingly, despite the strong economy, risk-on assets fell, primarily due to mounting concerns over further interest rate hikes from the FED, leading many investors to exercise caution.

Observing patterns that emerge with each rate increase, the share market typically experiences a drop, followed by a period of robust growth, eventually recovering its previous position. This cycle has tended to repeat itself during this fiscal tightening period.

In the midst of these developments, Gold and Silver remain in a favourable position above their 200-day moving average (200MDA), with positive market forecasts for the upcoming month. Additionally, we've included Oil in our charts, highlighting its correlation with Bullion. As Oil prices rise, the cost of extracting precious metals from the earth increases, and economists predict growth for Oil in the coming period, potentially sparking further interest in precious metals.

Here’s today’s charts and market forecast below.

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

Oil daily chart

Gold Technical Analysis

Gold monthly analysis continues to recommend a STRONG BUY with Weekly analysis a NEUTRAL signal.

Technical indicators - Monthly Projections

Summary for Monthly Forecast: Strong Buy

Disclaimer

This news and any links provided are for general information only and should not be taken as constituting professional advice from Jaggards. Jaggards is not a financial adviser. We recommend you seek independent financial advice before making any financial decisions based on the information contained in this article.