In the gold analysis made by ALB Investment, “In the USA, there is a decline in the dollar index (DXY) and an increase in gold prices, as the banking crisis feeds the fears of recession and the latest economic data remains below expectations. If non-farm employment to be announced on Friday remains below expectations, the rise in gold may accelerate.
The number of job postings in the USA decreased by 632 thousand to 9.93 million in February; The expectation was 10.5 million. Factory orders in the country fell 0.7 percent in February. The expectation was for a 0.5 percent decline. In the analysis made by ALB Investment, it was stated that both data point to a cooling in the economy, and that “the decrease in the number of job postings and factory orders in the USA more than expected weakens the more aggressive FED's forecasts in interest rates. With this effect, an ounce of gold again exceeded 2 thousand dollars. If the US Non-Farm employment data, which will be announced on Friday, is realized below the expectations of 240 thousand, the continuation of the rise in ounce and the movement towards the historical peak at $ 2 thousand 70 may occur. In this case, an increase of up to 1,285 TL can be seen in grams," the statement said.
Weak outlook in the dollar index
The analysis also drew attention to the developments in the dollar index (DXY). The fact that non-farm employment remains below expectations may lead to a downward break of the 100,800 level here as well and a pullback that may reach the 98.00-97.00 band. If DXY rises above 101,900 and 'permanence' above this level is not achieved, bearish pressure can be expected to continue. The global weakening of the dollar stands out as a factor that will support gold prices.
How does it affect oil prices?
In the analysis of the company; the recent rise in oil prices due to supply cuts may have some impact on inflationary pressure; However, it was stated that this effect may remain limited as long as $89 in Brent oil is not exceeded. In the analysis, it was evaluated that “even though the FED and ECB put the brakes on the interest rate, the funding rates will remain higher for a while, which may prevent more aggressive pricing on the gold side than anticipated in the short term”.
