World gold prices have had an unsuccessful trading week as the market is under pressure from the US Federal Reserve's "hawl" stance and geopolitical tensions in the Middle East are not large enough to stimulate a strong buying wave.
According to analysts, selling pressure appears when the market notices that high interest rates will continue, causing the cost of holding gold to increase. However, many opinions still maintain that gold still has the potential to recover thanks to the global risk of not cooling down.
Rich Checkan, chairman of an asset management company, believes gold could rebound: Mid-East tensions are escalating, while golds correction has gone too far. I believe the uptrend is not over yet.
Darin Newsom - market analyst - still rates gold as a long-term safe haven: "Despite short-term selling, global economic and political instability will continue to keep gold as a safe haven".
On the contrary, Adrian Day - Chairman of a fund management company - said that China's buying momentum is slowing down: "Western demand has increased but not strong enough to make gold prices break out. If there are no unexpected events, gold will move sideways or decrease slightly.
Adam Button - a currency strategist - commented: "Gold is currently reacting to the risk of war in Iran. If I knew the exact situation of the war, I would immediately know the direction of gold prices. Even if gold failed to surpass the April peak, the current price is still quite positive.
Marc Chandler, director of a foreign exchange analytics firm, warned of gold's ability to test medium-term bottlenecks: Despite the war, gold still fell more than 2% last week, the strongest decline in 5 weeks. If it breaks through the $3,265/ounce zone, the correction could extend and bring prices back to $3,200.
Sean Lusk - co-director of commercial risk prevention - assessed the gold outlook as un bright: FED maintains the view of not cutting interest rates early, the USD strengthens. hedge funds are still defensive, but in the medium term, the risk of price reduction is real.
Mr. Lusk also noted that some cash flow has shifted to other markets: " Metals such as platinum, palladium or silver are attracting capital thanks to industrial and jewelry demand, while gold is caught between high interest rates and a strong USD".
Alex Kuptsikevich - market analyst - warned that gold is being overbought: "Gold has increased for 6 consecutive months, the longest increase streak in 20 years. Meanwhile, investors are starting to turn to silver and platinum because supply is scarce and demand is stable. Gold could fall back to $3,100-$3,400 an ounce to accumulate.
Meanwhile, Colin Cieszynski - chief strategist of SIA Wealth Management - maintained a neutral attitude: "Gold prices fluctuated strongly as the conflict developed. Depending on the situation, prices can increase or decrease sharply. I think we cannot predict yet so we should keep the waiting attitude".
Fawad Razaqzada - a technical analyst - believes that the current $3,350/ounce mark is very important: "This is a strong support zone, used to be a strong resistance zone and also overlaps the 21-day average. If it falls below, the next target is $3,300/ounce. Conversely, surpassing $3,400 will pave the way for a new trial at the historical peak of $3,500/ounce.
In the long term, gold has been in an uptrend since 2018, but short-term signals show that selling pressure is not over yet, said Michael Moor, a chart analyst. If prices do not recover quickly above key technical milestones, the decline could continue.
Experts are leaning towards the scenario of gold prices to maintain an upward trend, thanks to geopolitical instability and supporting crop factors accounting for a larger proportion, but not overwhelming.
This week, the focus will be on indicators reflecting the US economic health such as the preliminary June PMI, consumer confidence, new home sales and especially the PCE inflation report - an important measure for the FED.
Adam Button commented: May PCE data is unlikely to change the Feds view as the inflation forecast is still below 2% before 2027. The market has partly predicted the inflationary trend through recent CPI and PPI reports".
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