Milliyet.com.tr/ Investors turned to gold against the banking crisis that started with SVB in the USA and continued with Credit Suisse in Europe. Demand for gold, which is seen as a safe haven, increased. So, will prices continue to rise? Here are the details…
Making statements on the subject, Ata Investment Domestic Markets Director Şükrü Cem Kaya said: “After the mini-crisis in the banking sector in the USA, the FED will be more cautious about interest rate hikes in the coming days and the increasing risk appetite due to the expectation of softening in verbal statements brought demand.
The sharp pullback in US bonds due to this perception seems to have increased the risk appetite. It can be expected that the current rising trend under ounce will continue towards the 1950 level and then the 2000 level. This expectation about the FED, due to the developments, keeps the US interest rate decision and subsequent statements at the top of the agenda. Despite the comments that he will pass and even interest rate cuts can be made, a 25 basis point rate hike is still priced in the markets as expectations.
The Fed will not want to make a serious strategic mistake and will continue to use the interest weapon in the fight against inflation. That’s why I expect a 25 basis point rate hike.
ABOUT OIL PRICES
Oil prices, on the other hand, are retreating due to the expectation that there will be a contraction in credit channels after the developments in the banking sector in both the USA and Europe, and the possibility of recession increases. Technically, the $71 level could be followed as support for Brent. If this level is broken, it will bring the $ 65 levels to the agenda. However, no matter what, the moves and explanations and future data related to the developments in banking will be decisive in these scenarios.
“MEANS MORE SYSTEMIC RISK”
Dynamic Investment Chief Economist Enver Erkan used the following statements on the subject: “With the collapse of Silicon Valley Bank, in the conjuncture, which is worried about the spread of the banking sector and rising interest rates are seen as a reason, an environment where high interest rates can be targeted has been moved away. From the Fed’s point of view, the strong employment report of February was the keynote at the March 21-22 FOMC meeting. had changed expectations to a 50 bps increase, but the markets came to the opposite conclusion after the latest bank developments, reducing the chances of a 50 bps move even further. The market has already shifted its pricing to a smaller 25 basis point rate hike in March.
Questions are currently being asked whether there will be another 25 basis point rate hike and whether there will be rate cuts later in the year. This is the question in the window that goes back to the FOMC. If banks step back from the recent hawkish rhetoric, it means that banking carries more systemic risk than previously thought.
ABOUT OIL PRICES
After a mild winter, energy prices have slowed down sharply. The ceiling in Russian oil, OPEC’s failure to change the status quo in production, and additional recession concerns seem to keep demand down, so the current price trend is down.”
THE LATEST SITUATION IN GOLD PRICES
Gram gold is trading at 1180 lira this morning, while an ounce of gold is trading at 1930 dollars.