Darin Newsom, senior market analyst at Barchart.com, said that gold prices will fall this week: "With the US FOMC meeting next week, December gold looks to be slightly lower next week. The short-term trend on the daily closing chart remains bearish."
Phillip Streible, Chief Market Strategist at Blue Line Futures, is bearish on the precious metal this week. The expert believes that the prolonged easing cycle with multiple 25 basis point cuts by the US Federal Reserve (FED) may disappoint the market. However, in the long term, gold prices will still be supported.
“Weaker-than-expected U.S. job growth in the latest report adds to the excitement about a Fed rate cut at its next meeting (September 17-18). That cut is almost certain. However, expectations for a big cut are probably too high and the market will likely be disappointed at that point,” said Phillip Streible.
Mark Leibovit, publisher of VR Metals/Resource Letter, also thinks gold could fall, although he still favors gold in the long term.
Kevin Grady - President of Phoenix Futures and Options said that all current gold price movements are related to the FED.
“I think people are expecting a 50 basis point cut in September. I don’t agree with the view that the Fed would panic if it started the easing cycle with a 50 basis point cut.
“This is a reasonable cut, I don’t think it will have a negative impact on the market. The question is whether the jobs data, which has seen unemployment fall, income and hours rise, will be enough to prevent the Fed from cutting 50 basis points later this month,” he said.
After a week dominated by jobs data, inflation is once again the economic data to watch this week, with the US CPI for August due out on Wednesday morning and the ECB interest rate decision on Thursday morning.
Thursday will also see the release of the US PPI for August, along with weekly jobless claims. Next week concludes with the release of the University of Michigan's preliminary survey of consumer sentiment for September on Friday morning.
This week, 14 analysts participated in the Kitco News Gold Survey. The results showed a clear shift in sentiment to the downside. Only four experts expect gold prices to rise this week.
Meanwhile, seven analysts believe gold will trade lower this week, with the remaining three experts predicting further declines in the precious metal.
177 votes were cast in Kitco’s online poll. Main Street investors remained bullish. Exactly 100 traders expect gold prices to rise this week. Only 29 expect the precious metal to trade lower. Forty-eight see gold prices trading sideways this week.
