Gold steadies on the global recession expectation

News of the day, Wednesday, March 23

Despite the recent rate hike by Fed, the S&P 500 rose rapidly by 6,2% last week, showing the most positive results since November 2020. However, Morgan Stanley strategists do not expect it to last long. The Treasury yield curve for 10-year and two-year notes is about to invert, according to the analysts. The inversion takes place when short-term rates exceed long-term, which is the opposite of normal conditions. “While this doesn't guarantee a recession, the signal on growth is clearly negative,” the strategists said.

The gold price stabilized while worries over the Ukraine crisis remain accordingly stable, supporting the demand for the safe-haven asset. The gold futures have remained flat at about 1930.00 during the past week. “The potential for higher interest rates globally is weighing on (gold). At the same time, the desire for safe havens in the face of the geopolitical conflict in Ukraine is supportive," said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.

The price of Brent crude is $116.50, WTI — $110.00, GBP/USD — 1.3230, EUR/USD — 1.1016, and gold costs $1926.50 per ounce.