World gold prices are forecast to break the $3,000/ounce mark next month, according to Chris Vermeulen, founder and investment director at The Technical Traders.
“Gold is still in a bullish phase right now,” Vermeulen told Kitco News. “Gold is still trading higher. It looks like it’s on the verge of breaking out and going up to $3,050.”
This comes as the US Federal Reserve (Fed) decided to maintain interest rates in the range of 4.25% to 4.5%, signaling a cautious approach amid a complex economic backdrop.
Fed Chairman Jerome Powell stressed that the central bank is in no rush to cut interest rates. He noted that the economy is strong and the Fed is pausing to assess further developments on inflation and assess the potential economic impact of President Donald Trump’s policies on trade, immigration and taxes.
The Fed is “playing it safe,” Vermeulen noted, adding that it will “continue to do so until it is necessary to change.”
President Donald Trump, a frequent critic of the central bank, has publicly pressed the Fed to cut interest rates immediately. President Trump has also indicated that he intends to tackle inflation through changes in energy, regulation, international trade and manufacturing.
Vermeulen said President Trump is the “wild card” for what happens next. “The big question is what he will do and how seriously and quickly he will do it. The Fed meeting was very boring and President Donald Trump is now an even bigger wild card for what happens tomorrow,” Vermeulen said.
The Fed’s next meeting in March will include updated economic projections. The central bank will continue to monitor incoming data, the overall economic outlook, and potential policy changes.
World gold prices hit a new record high on the morning of January 31, Vietnam time, with spot gold prices at $2,795.4/ounce, while gold futures for April delivery rose to $2,823.4/ounce.
Vermeulen believes that “gold is still in a very strong uptrend” and could reach $3,050 in February. Vermeulen predicts that gold prices will continue to rise due to economic and political uncertainties. “We are in the middle of a formative phase of the gold market, with both economic and political concerns supporting the price increase,” he said.
Vermeulen also warned that “gold prices will have a major correction in the coming period”, possibly this year.
