#XAUUSD @ 1723.18 Gold Price Forecast: bears are not ready to hibernate yet – SocGen
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Money managers double down on bearish positions for gold. Economists at Société Générale expect the yellow metal to remain under downward pressure.
“This week, ending 6 September, bearish flows, at $3.8bn, were even larger than the previous weekly flow, with gold accounting for $3.2bn. This flow came as money managers, awaiting a key US Fed interest rate policy setting meeting on 20-21 September, expect a third-in-a-row 75 basis point interest rate increase.”
“The Fed’s work of taming inflation through interest rates hikes is expected to erode the appeal of the precious metal compared to fixed income-generating products. Furthermore, higher interest rates in the US are likely to increase demand for the US dollar, which in turn would make gold more expensive to foreign investors and decrease demand for the bullion.”
“China and India are two important markets for the end use of gold: together they account for about half of the demand for the metal. In this respect, the US dollar gained 0.5% against the Indian rupee and 0.6% against the Chinese renminbi in the week ended 6 September, adding downwards demand pressure on gold.”
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