Gold price may continue to fall this week

Gold price closed the last session of the week at $ 1,812 an ounce with a decrease of 3.7% and this is the 4th consecutive week of decline. The gold market came under significant selling pressure as the US dollar hit a 20-year high. Although some analysts believe that gold is being oversold, it is clear that the precious metal does not have many favorable factors to support.

Marc Chandler, managing director at Bannockburn Global Forex, said rising rates have kept gold on the defensive, despite stable inflation indicators.

Of the 17 Wall Street analysts polled by Kitco News, 12 are predicting a further decline in gold prices in the coming week, while the rest expect prices to drop or move sideways.

For individual investors, the expectation on gold price also decreased. 51% of the 932 survey respondents predicted an increase in prices, while last week more than 60% of the respondents predicted the price would still go up.

Along with the strong USD price, many experts say that rising bond yields will also affect the precious metal. Chris Vecchio, senior market analyst at fund DailyFX.com, says that real bond yields have returned to pre-epidemic levels and the uptrend is just beginning.

Vecchio expects inflation to remain high, forcing the Federal Reserve to continue raising interest rates sharply. Eventually, real interest rates will move higher, which is bad news for gold. “I think it’s only a matter of time before gold trades below $1,800 and by the end of the year it will be below $1,700 an ounce,” he said.

Quynh Trang