Gold Prices 'Supported' at $1800 by G20 Tensions, Chinese Demand, Recession Threat

(February 27,2023-Atsuka Whitehouse)

GOLD PRICES held above what analysts called support at $1800 per ounce on Monday, despite the US Dollar and bond yields both steadying at multi-month highs amid recession warnings, new geopolitics tensions and continued bargain hunting in bullion from China, writes

Spot gold prices edged higher to $1812 per ounce after dropping earlier to a 2-month low at $1806.

The Dollar price of gold has now lost 7.6% since the 9-month high of $1959 reached at start-February, the day after the US Federal Reserve raised its key interest rate for the 8th meeting in a row and said that it doesn't foresee cutting rates in 2023.

"A higher for longer [Fed] is playing out in lower for longer precious pricing," says Nicky Shiels, head of metals strategy at Swiss refining and bullion finance group MKS Pamp, pointing to the US Dollar's continued rally after the Fed's preferred inflation indicator – the core PCE price index – came in higher than expected.

The Dollar index – a measure of the US currency's value versus its major peers – today edged lower after jumping 0.6% to hit a 3-month.

"But at $1800, physical floors and underpriced escalating geopolitics and 'hard landing' risks should see gold find a bottom," Shiels says.