G7 members are set to ban imports of Russian gold to tighten the sanctions squeeze on Moscow. Nonetheless, the yellow metal is expected to shrug off these headlines, economists at TD Securities report.
Fed pivot less associated with recession odds than in prior episodes
“G-7 ban on new Russian gold imports isn't expected to impact gold trading considering the LBMA's ban has already cut off new Russian output from major markets within the G-7. In turn, price action is reversing to reflect the minor impact on gold. However, gold prices are also being pulled higher as rising recession risks drive inflows into the yellow metal.”
“Gold bugs sniffing out a potential stagflationary outcome associated with lower growth but lingering inflation should also consider that central banks, facing a credibility crisis, could also continue to raise rates for longer than they otherwise would. In this scenario, pricing for a Fed pivot would be less associated with recession odds than in prior episodes.”
“In the near-term, continued whipsaws from CTA trend followers reflect the range-bound price action in the yellow metal as macro pressures build.”
See – Gold Price Forecast: XAUUSD to shrug off a G7 ban on imports from Russia – Commerzbank