(Kitco News) - In a research note from last week, UBS analysts cut forecasts on gold. The bank had been projecting $1700/oz by June of next year. Now the team of analysts downgraded the forecast to $1650/oz for 1 year. Gold is traditionally viewed as an inflation hedge but despite rocketing global inflation, the gold price has struggled. This could be explained by the rise in yields in the government bond markets.gold
Looking at the gold price today, the yellow metal is sitting at around $1730/oz. This comes after a pretty heavy fall from the highs seen in March of $2070.42/oz. There is a strong support level at $1676.91/oz and it seems that the UBS analysts feel that it could be under threat.
This week the markets are preparing for the latest Fed meeting. The consensus is that the central bank will raise rates bu 75% with some outside bets that the bank will raise rates by 100bps. The press conference will be a pretty important time round as analysts will be looking for clues to what might happen in September.
