Gold price could fall $100 as safe-haven premium weakens but prices won’t collapse â Natixis

Gold price could fall $100 as safe-haven premium weakens but prices won’t collapse – Natixis

The gold market could see a $100 drop as its geopolitical safe-haven premium weakens after Russia said it would scale back its war in Ukraine; however, don’t expect to see a collapse in gold or silver as the precious metals have some significant underlying support, according to one precious metals analyst.

In a telephone interview with Kitco News, Bernard Dahdah, precious metals analyst at Natixis, said that the gold market will remain volatile in the near term as the market continues to react to headlines surrounding Russia’s war with Ukraine.

“The market should ignore the words from Russia until the bombs stop,” he said.

However, he added that investors need to keep an eye on gold’s war premium.

“For gold to go higher, the war needs to escalate, and I don’t see that happening unless Russia decides to weaponize its commodities and cuts off its oil and gas to Europe,” he said. “In the near-term, I see gold prices going lower, but it won’t collapse in a heap.”

Looking past the conflict in Eastern Europe, Dahdah said he sees gold trading in a new range with support holding around $1,800 an ounce. He explained that rising inflation pressures had created a new base for gold.

At the same time, Dahdah said that he sees silver holding a new base at $22 an ounce; however, he added that silver could struggle a little bit more than gold as industrial demand struggles in the face of weakening global economic growth.

Along with the precious metal’s shifting safe-haven premium, Dahdah said that gold faces some challenging headwinds from a rising U.S. dollar as the Federal Reserve raises interest rates. Meanwhile, Dahdah said that European Central Bank would keep interest rates low as it faces a potential recession.

Currently, markets are pricing in potentially seven interest rate hikes this year and see two 50-basis point moves in the first of the year.

Although interest rates are going up, Dahdah noted rising inflation would keep interest rates in negative territory. He added that Russia’s war with Ukraine is creating long-term issues in commodity markets that will keep inflation pressures elevated through 2022.

When gold's volatility calms down, prices will rally back to $2,000 – DeCarley's Garner

“Interest rates will be slightly less negative this year, but they will still be negative and that is good for gold,” he said. “Even if Russia ended the war today, sanctions will remain in place for a while and that will keep commodity prices elevated, driving inflation. We also expect prices to remain elevated as Western nations wean themselves off Russia Commodities.”

Dahdah also questions how aggressive the U.S. central bank can be as inflation destroys consumer capital and slows growth.

Europe is in worse shape as energy prices spiral higher. Dahdah said that if Russia cuts off energy commodities to Europe, the region could fall into a severe recession.

By Neils Christensen

For Kitco News

Contact nchristensen@kitco.com

www.kitco.com

Time to buy Gold and Silver on the dips

David

Gold, silver down but well up from early lows

Gold and silver prices are are solidly lower at midday Tuesday, but have moved well up from the sharp losses and five-week lows that were hit in early U.S. trading. The precious metals were pressured by an increase in trader and investor risk appetite. Profit taking and weak long liquidation by the shorter-term futures traders was also featured in gold and silver. Lower crude oil prices and rising bond yields are also weighing on the safe-haven metals. April gold futures were last down $26.30 at $1,913.70 and May Comex silver was last down $0.441 at $24.755 an ounce.

Risk appetite up-ticked Tuesday as Russia and Ukraine are holding more ceasefire talks. One Russian official termed the talks as being constructive. Also, the grind of that war and no major new developments recently have somewhat numbed the marketplace. Limiting trader and investor enthusiasm, especially in the raw commodity sector (including gold and silver), is Covid cases that are on the rise in China, including China placing its largest city of Shanghai in a major rolling lockdown. It seems the pandemic just cannot be tamped down for long. Global stocks markets were mostly higher overnight. The U.S. stock indexes are higher at midday.

Hawkish Fed spooks hedge funds to take some profits in gold, but sentiment remains solidly bullish

The key outside markets see Nymex crude oil prices solidly lower and trading around $102.50 a barrel. An OPEC meeting is scheduled for Thursday to discuss cartel production levels from May forward. The U.S. dollar index is solidly lower early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.42%.

Technically, April gold futures prices hit a five-week low early on today. Bulls have the overall near-term technical advantage but are fading badly this week. Prices are now in a three-week-old downtrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at last week’s high of $1,967.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at today’s high of $1,929.40 and then at $1,950.00. First support is seen at $1,900.00 and then at today’s low of $1,888.30. Wyckoff's Market Rating: 6.0

May silver futures prices hit a five-week low early on today. The silver bulls have the slight overall near-term technical advantage but are fading. Prices are now in a three-week-old downtrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at last week’s high of $26.16 an ounce. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today’s high of $25.135 and then at $25.50. Next support is seen at $24.55 and then at $24.25. Wyckoff's Market Rating: 5.5.

May N.Y. copper closed up 90 points at 473.45 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 500.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 446.85 cents. First resistance is seen at last week’s high of 481.75 cents and then at 490.00 cents. First support is seen at this week’s low of 464.20 cents and then at 460.00 cents. Wyckoff's Market Rating: 6.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

David

Big drop in oil, rising bond yields sink gold, silver

Gold and silver prices are lower in midday U.S. trading Monday, as strong losses in crude oil and rising U.S. bond yields are pressuring the precious metals to start the trading week. Gold and silver market bulls can correctly argue that today’s losses were just routine downside price corrections in existing near-term uptrends. April gold futures were last down $15.90 at $1,938.20 and May Comex silver was last down $0.375 at $25.24 an ounce.

Global stocks markets were mixed overnight. The U.S. stock indexes are lower at midday. The Russia-Ukraine war continues to sap trader and investor confidence, with rising inflation doing the same. The marketplace is now factoring in a more aggressive pace for the Federal Reserve to raise U.S. interest rates, including 50 basis points at the May FOMC meeting, and maybe the same at the meeting after that.

Also worrisome to the marketplace is China placing its major city of Shanghai in a major Covid rolling lockdown. Reports said Tesla has halted production in its factory at Shanghai. Crude oil prices dropped in part on the news.

PIC

Ethereum is about to become even more valuable; The 'Merge' is crypto's most important event now

The key outside markets see Nymex crude oil prices sharply lower and trading around $108.00 a barrel. The U.S. dollar index is higher early today. The benchmark U.S. 10-year Treasury note is presently yielding 2.452%, after overnight rising to the highest in almost three years. Parts of the yield curve have now inverted, which is suggesting weakening U.S. economic growth.

Technically, April gold futures were bulls have the overall near-term technical advantage but trading has turned sideways and choppy again. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,895.20. First resistance is seen at $1,950.50 and then at last week’s high of $1,967.20. First support is seen at today’s low of $1,924.50 and then at last week’s low of $1,909.80. Wyckoff's Market Rating: 6.5

May silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the March high of $27.495 an ounce. The next downside price objective for the bears is closing prices below solid support at $24.00. First resistance is seen at $25.50 and then at today’s high of $25.795. Next support is seen at $25.00 and then at last week’s low of $24.695. Wyckoff's Market Rating: 6.5.

May N.Y. copper closed up 220 points at 472.10 cents today. Prices closed nearer the session high today. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 500.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 446.85 cents. First resistance is seen at last week’s high of 481.75 cents and then at 490.00 cents. First support is seen at today’s low of 464.20 cents and then at 460.00 cents. Wyckoff's Market Rating: 6.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

David

Can Bitcoin be banned? Kevin O’Leary and Roy Niederhoffer debate regulation and $500 million Bitcoin price target

Can Bitcoin be banned? Kevin O'Leary and Roy Niederhoffer debate regulation and $500 million Bitcoin price target

With Russia's invasion of Ukraine and inflation at decade-highs dominating the markets, how do Bitcoin, Ethereum, altcoins, and DeFi stack up? Can they still be banned, and what are some real long-term price targets?

In Kitco's power panel, Shark Tank star Kevin O'Leary said that banning Bitcoin and other cryptos was no longer an existential threat.

"There's no chance that we're going to be banning Bitcoin or anything else that holds economic promise in terms of developing new technologies for financial services and payment systems," O'Leary told Kitco's Editor-in-Chief Michelle Makori. "That's always been the hallmark of American entrepreneurship. We're not going to ban that."

On the other side of the debate was hedge fund manager Roy Niederhoffer, founder of R. G. Niederhoffer Capital Management. And he is not ruling out a ban.

Niederhoffer reminded investors that there was a time when even gold was banned in the U.S. "There's a chance that Bitcoin could be banned. The private ownership of gold was banned in many countries, including the United States," Niederhoffer said. "However, were that to happen, it would be such an environment of chaos and hyperinflation that Bitcoin would be worth even more money at that point. If they're going to ban it, it's going to be the time when you absolutely want to load up on Bitcoin."

Both panelists agreed that regulation of the crypto space was inevitable, but would lead to a massive rally.

O'Leary explained: "[Once] we get this regulation in place, the institutions [will be] pouring trillions of dollars. Those that have been speculators will benefit from the fact that these will get indexed and that will be a great upside."

Niederhoffer's long-term price target for Bitcoin includes a scenario where the cryptocurrency could hit $500 million based on inflation and adoption rates.

"In 20 years, you [could] have bitcoin price 30 times what it is now and in 30 [years] 85 times what it is right now. We are talking about a Bitcoin price of $3.8 million," he said. "We can go beyond that. If inflation is at 15% for 30 years and the Bitcoin market cap rivals that of the euro, we are talking about a Bitcoin price of $56 million. And if Bitcoin becomes the world reserve currency and we have 20% inflation, Bitcoin price is going to be almost $500 million."

O'Leary and Niederhoffer also shared investment tips and broke down their crypto market outlooks. Watch the full video for more insights!

By Kitco News

For Kitco News

Time to buy Gold and Silver on the dips

David

Gold holds its ground as bond yields hit 2.5%

The gold market is ending the week just above $1,950 an ounce, a slightly more than 1% gain from last Friday; however, investors need to look past the raw numbers and the environment that gold is trading in.

Gold prices have established a new range above $1,900 as the U.S. dollar index holds near a two-year high. Even more incredible, gold is holding firm in the face of rising bond yields. Early Friday, the yield on 10-year notes rose to 2.5%, its highest level in three years.

Some analysts suggest that bond yields have room to move higher as the Federal Reserve looks to tighten interest rates faster than expected. Tuesday, Federal Reserve Chair Jerome Powell shocked markets when he said that inflation is now too high. He signaled that the U.S. central bank could raise interest rates by 50 basis points in May. Markets also see the potential for a second 50-basis-point move in June.

However, the gold market is not taking these threats too seriously. To use an old cliché, some analysts have said that the Fed's bark is worse than its bite.

"It's easy to release an aggressive dot plot, and it's easy to talk tough in press conferences and speeches. But it's a lot harder to actually raise rates seven times in the course of one year and four times in the following year and increase the risk of choking off the economic cycle," said Kristina Hooper, chief investment strategist at Invesco, in a report.

Not only is the Federal Reserve talking tough, but analysts note looking at the big picture, even if the Fed meets its aggressive goals, interest rates will still be around 2%. Meanwhile, annual inflation is currently at 7.9%. Some economists expect that it could drop to between 4% and 6% by the end of the year, but the bottom line is that real interest rates are going to remain in deeply negative territory.

A weaponized U.S. dollar could prompt central banks to diversify with more gold – MKS' Shiels

But it's not just monetary policy driving investment demand into gold. Russia's war with Ukraine continues to support safe-haven demand for the precious metal.

The humanitarian crisis in Eastern Europe continues as the war rages. So far, more than 3.7 million refugees have left Ukraine, and about 6.5 million people have been displaced within the country.

Many geopolitical analysts do not expect the conflict to be resolved anytime soon, so market uncertainty and volatility will remain prominent in financial markets.

However, there is a new element to the conflict as western economic sanctions start to bite and the U.S. dollar is weaponized. Gold could assert itself as a new global currency.

By Neils Christensen

For Kitco News

Time to buy Gold and Silver on the dips

David

Can gold price tackle $2,000 next week? Here’s how that can happen

Can gold price tackle $2,000 next week? Here's how that can happen

After another solid week of gains, gold could be ready to take on the $2,000 an ounce level next week. But there are a few technical elements that need to come together for that to happen.

Gold was able to advance more than 1.3% on the week despite a massive surge in U.S. Treasury yields, triggered by markets betting on a more aggressive Federal Reserve. This comes after Fed Chair Jerome Powell signaled a possibility of 50-basis-point hikes at upcoming meetings in May and June.

On Friday, the 10-year rate jumped, hitting 2.503% on Friday — the highest level since May 2019. And April Comex gold futures were last at $1,957.00.

"Higher yields are typically negative for non-interest bearing gold, but for now, the ongoing divergence between the two asset classes highlights the market's newfound sensitivity to inflation and the need to buy any/all real assets (including gold) as a hedge," said MKS PAMP head of Metals Strategy Nicky Shiels.

There is also a growing concern that the yield curve will invert. The relationship analysts pay close attention to is the 2-year and 10-year Treasury yields.

"Typically, when you see an inversion of the yield curve, it projects a strong possibility of some kind of a recession further out. Markets are expecting to see weakness in the next two quarters. We already had one of the worst Januaries on record for equities. And gold has been making higher lows and higher highs. And it could push back up to $2,000," said Blue Line Futures chief market strategist Phillip Streible.

'Nothing but a series of black swan events' since mid-2019, what shock is next? Goehring & Rozencwajg weighs in

Inversion of the yield curve happens when long-term debt instruments have a lower yield than short-term debt instruments. And markets use this gauge to sometimes foreshadow a recession.

"We know that the yields curve is beginning to flatten. Rates continue to move higher. So far, there is no indication that the Fed is going to back off on rates. The market is talking about half-a-point moves at the next two meetings," RJO Futures senior market strategist Frank Cholly said.

There is a lot of debate around whether or not an inversion of the yield curve is a precursor to a recession. Still, the topic is definitely on everyone's minds as slower growth seems inevitable due to the Federal Reserve's aggressive monetary policy tightening.

"Once in a while, we'll see the curve starts to flatten. I am convinced yet that it is leading towards a recession. But I am concerned that the Fed may slam the brakes on growth a little too much if we do see continued rate hikes," Cholly told Kitco News.

However, markets might be pricing in too many rate hikes for this year, Streible pointed out. "The only thing the Fed can do is disappoint form here. It won't be able to raise rates in a weakening economic environment," he said.

The Fed is projecting seven rate hikes in 2022, but that number is likely to come down to five, Streible added.

For gold, this is a very constructive environment. "Gold is going to go higher next week. Gold is doing well against the yields. The number of rate hikes from here is limited. Rising yields are hitting their objectives at these levels. Gold should find some support," Streible told Kitco News.

And on top of the new safe-haven demand in light of the war in Ukraine, there is the inflation narrative that will continue to drive gold higher this spring.

The key level for gold to hit and sustain is the $1,957 an ounce, said Cholly. "I feel more bullish. Gold bounced up after hitting $1,900. We need to stay above $1,950. Once it is above $1,975, I start to feel encouraged again that we'll be above $2,000. We spent a week trading between $1,925-$1,950. The next level is $1,950-75 and then $2,000.”

Data to watch

Next week's two main data releases will be the U.S. Q4 GDP number and the employment report. Market projects see the GDP at 7.1% and for the U.S. economy to have added 488,000 jobs in March.

"The jobs numbers will be in focus, but while we know demand is incredibly strong, the issue is a lack of supply of workers to fill the vacancies available," said ING chief international economist James Knightley. "Like supply chain strains, a lack of suitable workers is holding back growth potential and putting up costs as wages get bid higher in a red hot jobs market."

Anything around 500,000 jobs for March would support expectations of a 50-basis-point rate hike in May, Knightley added.

Tuesday: CB Consumer Confidence

Wednesday: ADP nonfarm employment, GDP Q4

Thursday: Jobless claims, PCE price index

Friday: Nonfarm payrolls, ISM manufacturing PMI

By Anna Golubova

For Kitco News

Time to buy Gold and Silver on the dips

David

Gold, silver sharply up on safe-haven buying, inflation worries

Gold and silver prices are are sharply higher in midday U.S. trading Thursday, as safe-haven demand is featured amid marketplace risk aversion that remains elevated amid the Russia-Ukraine war. Sharp gains in crude oil prices this week are also bullish for the metals markets, even though oil prices backed off today. April gold futures were last up $26.70 at $1,964.00 and May Comex silver was last up $0.736 at $25.925 an ounce.

The Russia-Ukraine war and its widespread market implications continue on the front burner. President Biden Thursday is meeting with NATO and EU leaders to discuss the war. The two-day summit will be held at NATO headquarters in Brussels.

There are some reports surfacing that Russian President Putin’s war is producing cracks in the Kremlin. The reports said the Russian central bank chief quit and has left the country, while another official wanted to resign but Putin would not allow it.

Reports said Russia’s stock market has partially reopened and was trading higher, but foreigners have been banned from selling.

The other element impacting the marketplace is inflation, which has intensified because of the war. Rising inflation is historically bullish for metals markets. Global bond market yields have been rising sharply recently, with U.S. Treasury yields nearing three-year highs. The U.S. 2-year and 10-year yield curve is very close to inverting, which would begin to suggest a U.S. economic recession.

It's time to gear up for two 50-point hikes in May and June, says Goldman

The key outside markets see Nymex crude oil prices down and trading around $112.00 a barrel. The U.S. dollar index is firmer today. The benchmark U.S. 10-year Treasury note is presently yielding 2.3%.

Technically, April gold futures prices hit a two-week high today and saw a bullish upside breakout from the recent sideways trading range. Bulls have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the March low of $1,895.20. First resistance is seen at $1,976.50 and then at $1,985.00. First support is seen at today’s low of $1,937.40 and then at $1,925.00. Wyckoff's Market Rating: 7.0

May silver futures prices hit a two-week high. The silver bulls have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the March high of $27.495 an ounce. The next downside price objective for the bears is closing prices below solid support at $24.55. First resistance is seen at today’s high of $26.16 and then at $26.50. Next support is seen at $25.50 and then at today’s low of $25.17. Wyckoff's Market Rating: 7.0.

May N.Y. copper closed down 135 points at 476.30 cents today. Prices closed nearer the session low today after hitting a three-week high early on. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 500.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the March low of 446.85 cents. First resistance is seen at today’s high of 481.75 cents and then at 490.00 cents. First support is seen at 470.00 cents and then at this week’s low of 465.60 cents. Wyckoff's Market Rating: 7.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

David

Concerns about the Ukraine war and global inflation increase bullish sentiment for gold

After declining over $60 per ounce last week gold found solid footing and support at approximately $1920. As of 4:30 PM EDT gold futures basis, the April 2022 contract is up by $6.50 and fixed at $1935.90. April gold has become spot pricing with a first-day delivery notice on Friday of this week. The most active contract month in gold switches every two-month increments, so the next front month for gold will be the June 2022 contract. Currently, the spread between April and June gold futures is approximately five dollars, with the June futures contract currently trading up $6.90 and fixed at $1940.80.

Both U.S. equities and the precious metals saw volatility in the market as it first reacted to statements by the Federal Reserve Chairman Jerome Powell at the National Association for Business Economics today. In his speech today, Chairman Powell said, “We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.”

This statement, of course, reinforces the idea that the Federal Reserve is committed to reducing the current level of inflation through the use of interest rate hikes. It underscores the real possibility that the next rate hike announced and implemented will occur during the May FOMC meeting and most likely will be a rate hike of ½% rather than the anticipated hike of ¼%. This is also reflected in the Fed watch tool.

The CME’s FedWatch tool reflected the extremely hawkish statement made by Chairman Powell today. This tool currently indicates the probability of a ½% rate hike which would put the Fed Funds rate to 75 – 100 basis points (3/4% to 1%) is now 57.2% up from 43.9% on Friday. This probability calculator also indicated that the probability of a ¼% rate hike has declined from 56.1% to 42.8%.

The challenge that the Federal Reserve faces is to combat the high level of inflation effectively. To successfully combat inflation, they would need to raise interest rates to approximately the current level of inflation, with the CPI index at 7.9% in February and the PCE at 6.1% in January. That would be an impossible task to accomplish. The PCE index will be updated on March 31 and reflect February’s inflationary level. Concurrently the Federal Reserve expects to raise interest rates to 1.9% this year and 2.8% in 2023. With interest rates at that level, it would slow the economy down but have a very small impact on the high level of inflation that exists.

Inflationary pressures will most certainly increase in the United States. However, inflationary pressures in the United States will be dwarfed when compared to the inflation rate of Europe. This is because Ukraine and Russia export the largest percentage of wheat in the EU. The EU also imports the vast majority of the oil and gas from Russia.

In other words, inflationary pressures will continue to rise both in the United States and Europe, and central banks raising interest rates will not be enough to lower that pressure dramatically.

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

David

Gold price at $2,500, oil price at $50 in 9 months?

The war in Ukraine and inflation fears remain the top drivers for gold, which is up around 6% since the start of the year. Here's a look at Kitco's top three stories of the week:

3. Hawkish Powell: U.S. economy 'can handle' six more rate hikes

2. Elon Musk's advice when it comes to high inflation: own 'physical things'

1. What's this year's 'potential end game'? Gold price at $2,500, oil price at $50 – Bloomberg Intelligence

By Anna Golubova

For Kitco News

Time to buy Gold and Silver on the dips

David

Volatile gold price action is here to stay as safe-haven interest ‘reignited’ – analysts

Volatile gold price action is here to stay as safe-haven interest 'reignited' – analysts

Gold could easily make another run at $2,000 an ounce next week as the geopolitical situation is not easing, but the volatile price action is here to stay, according to analysts.

After making a run for record highs last week, gold tumbled below $1,900 an ounce and managed to stabilize just below $1,930 an ounce on Friday. April Comex gold futures were last at $1,927.70, down 0.80% on the day.

Looking ahead, the market is still facing another uncertain weekend on the geopolitical front, with the war in Ukraine remaining the top driver for commodities. "We are watching what's going on in Ukraine. Frankly, nothing is more important to the market. It could shift the calculus on risk," said TD Securities head of global strategy Bart Melek.

Also, many in the gold space remain unconvinced that the Federal Reserve can raise rates six more times without significantly slowing down the economy.

"Gold prices continue to trade above $1,900/oz, despite the first Fed rate hike since 2018. The March meeting was hawkish but did not derail the positive sentiment towards gold," said Standard Chartered precious metals analyst Suki Cooper. "Current geopolitical risk has led to concerns that inflation could surge even higher for longer, reigniting longer-term interest in gold."

These past few weeks, investor interest in gold jumped – a big driver for prices, noted Cooper, warning of more volatility. "While the physical market has come under pressure, growth in investor interest has more than offset this weakness, suggesting that volatile price action is here to stay," she said.

Aside from the geopolitical uncertainty, investors are still digesting the Fed's new hawkish stance.

"Gold's reacted negatively to the Fed, but we saw the metal erase most of its losses after the central bank's announcement. As hawkish as the Fed was, the market is still skeptical that there will be six more rate hikes. That's a very aggressive forecast that didn't align with the Fed's inflation expectations of 4.3% this year," said Gainesville Coins precious metals expert Everett Millman.

Any pullback in those expectations would be positive for gold going forward, Millman added. "I am bullish right now. It is very healthy that gold pulled back this week. At the same time, we have to watch out for more volatility," he said.

Plus, inflation expectations are still bound to worsen after February's U.S. CPI data showed inflation at 7.9% — a fresh 40-year high.

"We still haven't seen the massive spike in food prices translate in. The problem is that 60% of CPI components are up 5% year-on-year," said Melek. "It is no longer transitory inflation. It is aggregate. Inflationary expectations could get de-anchored. As far as gold is concerned, Fed's promise doesn't become restrictive fast enough to fight inflation. This is a positive environment for gold."

IMF's warning: Russia's invasion of Ukraine 'may fundamentally alter' global economic and geopolitical order

A run to $2,000 an ounce level is not being ruled out, but the question is whether gold can stay there, added Melek. Analysts also stopped talking about gold dropping to $1,400. "And that's the trick," said Melek. "If the Fed becomes too restrictive, gold will sell-off. But it will be stronger than we thought a month ago on the downside."

Gold price levels to watch this week are $1,920 as support, followed by $1,875, noted Melek. The first major resistance comes in at around $1,980.

Millman is looking at $1,900 an ounce as support and $2,00 as resistance. "After $1,950, I wouldn't be surprised to see gold break $2,000," he said.

It will be a light data week, with markets watching Wednesday's new home sales and Thursday's durable goods orders, jobless claims, and manufacturing PMI.

"Data includes durable goods orders, which will be dragged lower by a drop in Boeing aircraft orders. Strip these out, and the report should be solid given evidence seen in business surveys, such as the ISM report. There are also plenty of housing data, which should be OK," said ING chief international economist James Knightley.

By Anna Golubova

For Kitco New

Time to buy Gold and Silver on the dips

David