Gold Price Maintains Momentum as Next Fed Meeting Approaches

This week brought more momentum for the gold price, which rose above US$1,985 per ounce on Wednesday (July 19), a level not seen since late May. While the yellow metal didn’t stay there for long, it ended the week at just over US$1,960.

The US Federal Reserve’s next meeting is quickly approaching, and market participants are watching closely to see what the central bank’s next move will be. Currently the broad consensus is that the Fed will hike by 25 basis points at the gathering — 106 economists polled by Reuters believe that will happen, and the majority also think it will be the Fed’s last increasing during this tightening cycle. That’s up for debate given the latest “dot plot” projections from Fed officials, but only time will tell.

The question of whether the Fed will be able to secure a soft landing for the US economy is of course front and center as well. While many experts are still calling for a recession, others believe that Chair Jerome Powell will be able to engineer a scenario where inflation returns to targeted levels without a major disruption.

Notably, Goldman Sachs’ (NYSE:GS) chief economist recently said the bank now believes there’s only a 20 percent chance that the US economy will enter a recession in the next 12 months — that’s down from its previous 25 percent forecast.

“The main reason for our cut is that the recent data have reinforced our confidence that bringing inflation down to an acceptable level will not require a recession,” Jan Hatzius said this past Monday (July 17).

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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