World gold price movements last week
Gold prices fluctuated sharply last week. Despite recovering in Friday's session, spot gold still ended a 4-week consecutive rally.
Spot gold prices opened the week at 4,790.17 USD/ounce. After falling to test the support zone around 4,750 USD, this precious metal rebounded sharply on Monday, setting the week's highest level at 4,830 USD/ounce right after 6:30 PM EDT.
However, prices then faced strong selling pressure, in which Tuesday's session recorded the strongest drop of the week when gold lost more than 2%, falling to a weekly low of nearly 4,672 USD/ounce about 30 minutes before the North American stock market closed.
Analysts believe that this development stems from the strengthening of the USD, increased bond yields and growing expectations that persistent inflation will force interest rates to remain at a higher level for longer, thereby reducing the attractiveness of gold - an interest-free asset.
The market also reacted to escalating geopolitical tensions in the Middle East, including the recurrence of transport disruptions across the Strait of Hormuz, causing oil prices to rise sharply and increasing inflation concerns, thereby putting pressure on gold prices as traders re-evaluate monetary policy prospects.
By midweek, gold prices began to stabilize again as the market absorbed information about changes related to the fragile ceasefire and ongoing negotiations surrounding tensions between the United States and Iran. Temporarily cooling down geopolitical risks helped reduce selling pressure, while bottom-fishing buying appeared around important support zones from 4,650 - 4,700 USD/ounce.
In Friday's session, gold prices recovered slightly thanks to weak US consumer sentiment data and increased inflation expectations after the final data of the consumer confidence index released by the University of Michigan confirmed the previous preliminary trend: one-year inflation expectations increased sharply, while consumer sentiment weakened.
This shows that price pressure in the economy is still persistent, thereby supporting gold to increase to a new high in the session of nearly 4,740 USD/ounce as investors consider the inflation hedging role of this precious metal.
However, the upward momentum is still limited due to high oil prices and prolonged geopolitical instability continuing to cast a shadow over interest rate prospects. Despite recovering at the end of the week, gold still recorded the strongest weekly decline in more than a month, closing the week above the threshold of 4,700 USD/ounce.
Gold price forecast for next week
A weekly gold survey with Wall Street experts shows that views are divided and uncertain about the short-term trend of gold prices;
This week, 16 experts participated in Kitco News' gold survey. Wall Street analysts' sentiment is assessed as rarely seenly balanced in the context of the market lacking clear trend signals.
There are 5 experts, equivalent to 31%, predicting that gold prices will increase next week; while 5 others also believe that prices will decrease. The remaining six experts predict that gold will continue to move sideways and accumulate next week.
Meanwhile, Kitco's online survey recorded 16 votes from individual investors, with the sentiment of the Main Street group also being similarly hesitant. 6 small investors, equivalent to 38%, expect gold prices to increase next week; 5 others, accounting for 31%, predict this precious metal will weaken. The remaining five investors, equivalent to 31% of the total votes, believe that gold prices will remain flat next week.
Notable economic data for next week
After many rather quiet weeks, the economic calendar for next week will be more vibrant, with the focus being a series of monetary policy decisions from major central banks.
The market will follow the BOJ's decision on Monday evening, the US consumer confidence report for April on Tuesday morning. On Wednesday, the US will release investor data and construction permits, before the BoC and Fed successively make interest rate decisions.
By Thursday, BoE and ECB will announce monetary policy, along with GDP data, US PCE and weekly unemployment claims. The trading week closed with the ISM manufacturing PMI report for April on Friday morning.
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