Gold remains undervalued as markets continue to price in a pivot in second half of 2023

9.9.22 - Elites Lie About Inflation

Gold last traded at $1,716 an ounce. Silver at $18.83 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on bargain hunting and a weaker dollar. U.S. stocks staged a relief rally after weeks of fretting over the economic impact of higher interest rates.

KITCO--"According to Huw Roberts, head of analytics at Quant Insight, with rising interest rates and a strong U.S. dollar, gold prices should be trading around $1,760 an ounce. Although gold is about 2% below its fair value, Roberts said that traders could be waiting for a better entry point....

Although it's a challenging environment for gold, Roberts said there is still potential for the precious metal. He explained that in July, markets prematurely started to expect the U.S central bank to pivot on its aggressive monetary policy; however, hawkish comments from Powell dashed that expectation. Markets see a 76% chance of a 75-basis point move later this month.

'Gold investors got excited about a dovish pivot, and those expectations haven't gone away; they have just been pushed back to the second half of 2023,' he said.

Although the market currently believes in the Fed's aggressive stance on inflation, Roberts noted that a lot can happen in the next six months.

'Looking at current macro fundamentals, in the current environment, gold is undervalued.'"