Why selloff in gold is not over: $1,600 danger zone for gold price

the Kitco News) After a hawkish Federal Reserve drove up the value of the dollar and Treasury yields, gold is trading close to 2.5-year lows.

Analysts predict that this macro climate will cause more individuals to turn away from gold, which will present a fantastic purchasing opportunity.

This week, the precious metal plummeted another 1.7% as a result of market volatility and extreme FX moves.

The Fed increased its funds rate to 4.4% at the end of 2022 and to 4.6% in 2023 after hiking rates by 75 basis points for the third consecutive time.

This might result in another 75-basis-point increase for markets in November and a further 50-basis-point increase in December.

"The markets' predictions of what would happen to the federal funds rate during the coming year have increased significantly.

Compared to a month ago, there has been a significant change, which is consistent with the Fed's increased aggressivity "Bart Melek, global head of commodity markets strategy at TD Securities, according to Kitco News.

"Real rates are going up. That is bad news for gold. Capital will likely flee if the opportunity cost and cost of carry are significant."