- The gold market remains trapped below $1,950 an ounce as the Federal Reserve is expected to maintain its aggressive monetary policies through the summer; however, price action is one factor that investors should be looking at when building a core position in gold, according to one market strategist.
She added that gold could continue to be well supported in the near term as investors look for opportunities to hedge against growing risks in the marketplace. U.S. economic activity has been relatively resilient in the face of the Federal Reserve's most aggressive tightening cycle in more than 40 years; however, Hooper added that excessive savings, driving consumer demand this year, is starting to dry up. She said that economists still don't know the full lagging impact rising rates will have on the economy.
"There is inherent, in any kind of tightening cycle, let alone an aggressive tightening cycle, risk of lagged effects that can do significant damage to the economy. We just don't know how much damage there will ultimately be," she said."We can make our best guess as to what could happen, but we know there is that alternative risk scenario where we could see a hard landing. That is another argument for gold, as part of a broadly diversified portfolio.