Gold: Rebound from One-Year Low Comes Despite Lingering Rate Risks – ING

Precious metals continue to face headwinds from elevated energy costs, interest rate expectations and the risk of liquidation across broader markets, according to ING strategists Warren Patterson and Ewa Manthey, despite a rebound in gold. Late last week, gold touched a one-year low as a surge in oil prices stoked inflation concerns and expectations that interest rates would remain higher for longer. A sell-off in technology shares compounded the pressure, prompting investors to liquidate positions to cover losses elsewhere.

Can precious metals withstand macroeconomic pressure?

"Gold fell to its lowest level in a year at the end of last week as oil prices surged amid inflation concerns and expectations that interest rates could stay higher for longer. Prices dropped 3.65% to $3,874.62/oz, with the sell-off in technology shares adding to pressure as investors reduced positions to cover losses elsewhere."

"For now, higher energy prices, rate expectations and the risk of further liquidation across broader markets remain headwinds for precious metals."

"Silver has been hit harder, sliding more than 6% and extending its October decline to roughly 18%. The widening gold-silver ratio also points to gold continuing to outperform silver during the latest precious-metals correction."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)