Gold Price Forecast: Further Chinese lockdowns sap XAUUSD demand – TDS
29.04.2022, 13:38

Gold Price Forecast: Further Chinese lockdowns sap XAUUSD demand – TDS

This week, gold hit its lowest levels since late February near $1,880. As economists at TD Securities note, Chinese lockdowns fuel demand concerns across the yellow metal market. 

Shanghai traders are liquidating their gold length at a fast clip

“Our tracking of the top SHFE traders' net length highlights continued and substantial liquidations from Shanghai traders cohort since last Friday. After all, concerns are emerging surrounding the broadening lockdown's impact on domestic demand for the yellow metal. With economic activity also plunging, jewelry sales are likely to collapse as well, which erodes a major pillar of support for the yellow metal.” 

“The outlook for investment demand also remains muted, with gold bugs staring down the barrel of a hawkish Fed, while safe-haven flows associated with the war in Ukraine begin to fizzle out.” 

“A contingent of participants also expects the Fed's ability to constrain supply-side inflation is limited, which argues for a stagflationary regime in which gold will be in high demand as a store-of-value. However, the decline in prices is rather nodding to a growing cohort which expects that the last month's inflation print may have marked the peak.”

 

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