SMM News: gold prices have experienced ups and downs this week, supported by risk aversion caused by geopolitical turmoil, gold rose $15 overnight on Monday (May 13). Then gold began a simultaneous decline from Tuesday to Thursday, and gold staged another big market on Thursday, plummeting more than $10 overnight! In the face of geopolitics, gold has failed to hold on to the gains brought about by fluctuations in other assets, and institutions are looking at it the same way-after the end of the year!
Gold investors need a little more patience because market conditions are not mature enough to trigger a long-term rise in gold, according to a research firm.
Howell (Michael Howell), managing director of), Crossborder Capital, said in an interview on Thursday that gold could rise in the second half of this year or early next year. Because the Federal Reserve will be forced to relax monetary policy to support the U. S. economy.
"We have been telling our customers that gold prices will rise sharply over the next 12 to 18 months," Howell said.
In the short term, however, gold investors will have to deal with stricter monetary policy and a relatively strong dollar. According to his company's latest research, both the Fed and the people's Bank of China are actually tightening monetary policy and removing liquidity from short-term money markets, Mr. Howell said.
Howell said the monetary tightening will continue to support the dollar in the short term, but will eventually prove unsustainable.
"We are concerned that the continuation of quantitative easing (QT) will lead to more financial instability and possibly even economic instability," analysts at the company said in a recent research note. "
Although Mr Howell did not explicitly point to the recession, he added that the tightening of money markets as a result of growing demand for safe short-term assets and reduced central bank liquidity had increased the "likelihood of a significant slowdown in the global economy".
Howell said he expects the U. S. central bank to ease interest rates as soon as possible because of increased economic uncertainty. His view is in line with current market expectations, which expect the Fed to cut interest rates by more than 70 per cent by the end of the year.