Adrian Day - President of Adrian Day Asset Management is one of the experts predicting gold prices to increase next week: "As we get closer to the US Federal Reserve's interest rate cut, the momentum could push gold prices higher.
The first rate cut in a cycle has been a bullish signal for gold for over 20 years. Although it is already priced in to some extent, I still expect a positive reaction.”
Kitco senior analyst Jim Wyckoff remains bullish on gold this week. "Gold prices are rising steadily as the charts remain bullish and fundamentals remain friendly," he said.
On the other hand, Marc Chandler - General Director at Bannockburn Global Forex expects gold prices to fall next week: "The bullish momentum has stalled. I can envision a decline that will take gold prices down to the $2,470-2,475/ounce range.
Phillip Streible, chief market strategist at Blue Line Futures, also had a less optimistic forecast for gold. However, he said that gold prices will not fall much and that the declines will provide buying opportunities. He added that September is typically a "bad month" for gold prices, so traders should look for buying opportunities.
Mark Leibovit, publisher of VR Metals/Resource Letter, and Ole Hansen, head of commodity strategy at Saxo Bank, also expect gold prices to fall this week.
"Gold is running out of steam. The precious metal is looking for consolidation ahead of the September FOMC meeting," said Ole Hansen.
Meanwhile, Darin Newsom - Senior Market Analyst at Barchart.com predicted that gold prices will go sideways: "I think gold prices will go sideways next week" - this expert said.
According to Bob Haberkorn - Senior Commodity Broker at RJO Futures, $2,500/ounce is the support level for gold prices.
Looking ahead to next Friday's jobs data, Haberkorn said that even if the US non-farm payrolls report is bad, he thinks it is unlikely that the Fed will cut 50 basis points to start their easing cycle.
“I think there’s a lot of pressure right now for a rate cut, and Fed Chairman Powell has hinted that it’s coming, and the market wouldn’t be surprised. But I don’t think a 50 basis point cut is possible, given the inflation and housing numbers that we’ve seen.”
Haberkorn said the most likely scenario is that the Fed does a 25 basis point cut, then sits back and watches. “They’ll cut 25 basis points at the next meeting,” he said.
Meanwhile, Adam Button, head of currency strategy at Forexlive.com, believes the Fed’s ability to cut rates further will depend on the unemployment rate in the payrolls report. Button said that seasonal weakness in September could provide a good buying opportunity for those on the fence.
Market participants will focus on employment figures this week as North American markets return from the weekend.
On Tuesday, the market will receive the US ISM manufacturing PMI for August. On Wednesday, there will be the Bank of Canada monetary policy decision and the US JOLTS Job Openings. Then on Thursday, traders will watch the ADP employment index for August, the weekly jobless claims report and the US ISM services PMI.
However, the most attention-grabbing event next week will be the US non-farm payrolls report for August, due out Friday morning. Some market experts believe the report could boost the Federal Reserve's expected September interest rate cut from 25 to 50 basis points.
