- Summary:
- Let's anayze how Gold price will be affected by high inflation and rate hikes in the coming months. XAU price forecast is still bearish
Gold price (XAUUSD) has wiped off all of its 2023 gains in this month. Since the start of February, price of Gold has fallen by 7.6%. The global safe haven asset started the year very strong by surging above $1950 in the first few weeks. However, the inflation data and hawkish Fed minutes tanked the price to fresh yearly lows.
How Much Is Gold Per Gram?
Gold usually trades in ounces in the global financial markets. One ounce is equivalent to 1/16th of a pound (lb). On Monday, Gold price per ounce is trading at $1809 after showing a minor loss of 0.02% in the last 24h. This gives us a per-gram price of $63.84.
The global commodities and equities are in a downtrend once again as the sticky inflation data has turned Fed more hawkish. Analysts are now expecting more rate hikes than previously estimated. A prolonged high-interest rate environment would dry up the liquidity from the markets. Goldman Sach and Bank of America have already predicted another 3 rate hikes of a collective 100 basis points.
The dollar strength index has been the biggest beneficiary of the rate hikes. The DXY index, which tracks the dollar against a basket of fiat currencies, broke above 105 points in Friday. This translated into a 4.3% gain since the start of the year. Gold price XAUUSD will remain in a downtrend as long as the DXY keeps rallying.
Gold Price Technical Analysis
The XAUUSD price is currently in a slump as investors await the March FOMC meeting. Since the increase in PCE inflation, there is a high likelihood of a 50 basis points hike in March. This will increase the selling pressure on speculative assets. In the coming day, the Gold price can slide to $1775 level.
This level comes into play due to the presence of a 200-day moving average and 0.5 fib retracement level. A breach of this level can tank the price to retest the November low of $1725. This will be a 4% price decrease from the current price level.
