Gold prices hinge on Fed and China factors

Investors in Türkiye ramp up searches on gold as prices stabilize locally, while globally, gold prices hover around $2,330, with the focus shifting to the Federal Reserve’s upcoming interest rate decisions

In Türkiye, gold prices have been showing stability recently, leading investors to increase their online searches for terms like “buying gold,” “selling gold,” and “gold price predictions for 2024.” The weakening of the dollar in domestic markets this week is also impacting the prices of gram gold.

In the free market, gram gold started the day at ₺2,430 ($75.06), while in Istanbul’s Grand Bazar (Kapalicarsi), it ranged from ₺2,425 to ₺2,395 for buying and selling, respectively. In the morning hours, a quarter gold coin sold for ₺ 4,053, a half gold coin for ₺8,131, and a full gold coin for ₺16,153.

In global markets, the price of an ounce of gold on April 30 hovered around $2,330. While it is 4% below the $2,431 peak, it has risen by 13% since the beginning of the year.

When will Fed cut rates? 

Regarding the pricing of gold ounces, the market’s attention is now on the Federal Reserve’s policy meeting, which is expected to provide insights into the central bank’s interest rate plans. 

Mehmet Ali Yildirimturk, an expert in gold and currency markets, pointed out that in recent months, there has been a growing expectation that the Fed will begin cutting rates in June, but this has been postponed due to signals from the U.S. economy.

“This week, instead of the Fed’s interest rate decision, President (Fed Chair Jerome) Powell’s statements are important. Clues will be sought as to which months the interest rate cut will be postponed,” Yildirimturk said.

China to be more decisive 

Yildirimturk emphasized that the prices of gold ounces continue to be affected by geopolitical tensions worldwide, purchases by central banks, especially China, and expectations of interest rate cuts.

“China’s gold stock has reached 308 tons. If their purchases continue, which seems likely, this development could be more decisive for gold prices than the postponement of the Fed’s interest rate reduction process. It is also observed that there has been an increase in gold demand among households and industries in China,” he said. 

Upward trend in gold prices to continue

Yildirimturk suggested that after corrective movements in gold prices, the upward trend could continue in the medium to long term, especially due to the China factor and geopolitical risks.

“In the short term, $2,350 is an important resistance. If this level is surpassed, movement toward $2,400 could be seen. Gold purchases by households continue alongside high inflation domestically. It is observed that some of the money leaving the Central Bank is directed towards gold, while some prefer high deposit interest rates,” he said. 

Source: Newsroom