Gold Price Forecast: Further Chinese lockdowns sap XAUUSD demand – TDS
|This week, gold hit its lowest levels since late February near $1,880. As economists at TD Securities note, Chinese lockdowns fuel demand concerns across the yellow metal market.
Shanghai traders are liquidating their gold length at a fast clip
“Our tracking of the top SHFE traders' net length highlights continued and substantial liquidations from Shanghai traders cohort since last Friday. After all, concerns are emerging surrounding the broadening lockdown's impact on domestic demand for the yellow metal. With economic activity also plunging, jewelry sales are likely to collapse as well, which erodes a major pillar of support for the yellow metal.”
“The outlook for investment demand also remains muted, with gold bugs staring down the barrel of a hawkish Fed, while safe-haven flows associated with the war in Ukraine begin to fizzle out.”
“A contingent of participants also expects the Fed's ability to constrain supply-side inflation is limited, which argues for a stagflationary regime in which gold will be in high demand as a store-of-value. However, the decline in prices is rather nodding to a growing cohort which expects that the last month's inflation print may have marked the peak.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.