Wall Street analysts and retail investors both believe that gold prices are still in an uptrend.
Optimism about gold prices dominated the market as the precious metal gained 1% last week, closing at $1,946.7 an ounce. Davie Madden, market analyst at Equiti Capital, forecast gold prices could rise to the threshold of 1,960 USD per ounce this week.
Bart Melek, director of global strategy at TD Securities, gives gold support and resistance levels next week ranging from $1,920 to $1,967 per ounce. Meanwhile, OANDA analyst Edward Moya said that next week gold could reach a high of $1,970 per ounce and a low of $1,900.
Survey results of Kitco News also shows that the bullish expectation is still the dominant trend. Ten out of 16 Wall Street analysts polled by Kitco, or 63 percent, think gold will rise this week. The remaining six analysts hold a neutral view on price.
On the retail side, 57% of survey respondents expect gold to bounce back next week, while 23% expect prices to fall and 20% to see prices move sideways.
Many analysts believe in the resilience of gold when bond yields rise, the US Federal Reserve (Fed) will tighten monetary policy through the end of the year. Currently, the 10-year bond yield has reached the highest level in the past 3 years.
Gold remains in an uptrend, but David Madden said he doesn’t expect to see a dramatic breakout in the price of the precious metal anytime soon. For gold to return to $2,000 an ounce, Madden said, there would have to be a major escalation in the Russia-Ukraine war. He noted that increased geopolitical uncertainty if Russia threatens Europe’s oil and gas supplies could push stock prices down and energy prices up.
“If stocks fall, investors will quickly want to hold on to something solid and that will send gold prices back to record highs,” Madden said.
The price of gold so far this year has increased 7%, and last week alone increased 1 percentage point despite concerns or tightening moves by the Fed. The price of this precious metal is also being supported by technical signals.
Phillip Streible, chief market strategist at Blue Line Futures, said that gold remains an attractive asset to investors.
Analysts noted that US inflation data due to be released on Tuesday is notable news for the gold market. With the trend of gasoline prices, food prices increasing sharply when the supply chain is tense…, many forecast that the US consumer price index in March will increase again. High inflation data pressured the Fed to raise interest rates by 50 basis points in May.
“Gold is still doing well even though we’re talking a lot about a Fed rate tightening cycle,” said Bart Melek.
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