World gold price movements last week
Gold prices closed the week in a weakening state after a series of 5 strong fluctuations, when selling pressure appeared from the beginning of the previous week before recovering towards the end of the week.
The market is struggling between persistent inflation risk and safe-haven demand, in the context of the Middle East conflict and monetary policy decisions of the central bank dominating developments.
Spot gold prices opened the week at 4,685.50 USD/ounce, quickly rising to a weekly peak of nearly 4,730 USD/ounce. However, the precious metal suffered significant pressure in the first two sessions of the week, falling to around 4,560 USD/ounce on Tuesday.
The main reason comes from rising oil prices and a strengthening USD, pulling US bond yields up, thereby strengthening expectations that interest rates will remain high for a longer time. The upward momentum of crude oil increased concerns about inflation, making gold - a non-profit asset - less attractive and being sold continuously in the middle of the week.
By Wednesday morning (North American time), gold prices hit the bottom of the week around 4, 510 USD/ounce. After recovering to 4, 560 USD/ounce, selling pressure returned in the afternoon session, when the US Federal Reserve (Fed) sent out new policy signals, showing internal differentiation and reducing short-term interest rate cut expectations.
The cautious tone, leaning towards "hawks", continued to support the USD, causing gold prices to be anchored near the week's lowest level as investors adjusted expectations about the monetary policy roadmap.
Despite pressure at the beginning of the week, gold prices gradually found support towards the end of the week. In Thursday morning's session, prices rebounded to nearly 4,650 USD/ounce. After the last drop to test the support zone around 4,560 USD/ounce on Friday morning, the precious metal recorded a slight recovery in the rest of the day, as the market digested signals from the Fed and continued to monitor geopolitical risks in low liquidity conditions.
However, the recovery momentum at the end of the week was not enough to help gold reverse the trend. The precious metal still recorded its second consecutive week of decline, losing nearly 2%, as expectations of high interest rates and high energy prices continued to put pressure on the market.
Gold price forecast for next week
The latest gold survey shows that Wall Street investors and individual investors tend to differentiate, with about half predicting gold prices may rise again next week, while nearly 1/3 believe that the precious metal will continue to decline.
This week, 16 experts participated in the survey, with Wall Street sentiment shifting to more positive in the context of optimistic expectations related to Iran and the "risk-seeking" trend returning to the market.
8 experts, equivalent to 50%, predict that gold prices will rise next week. Meanwhile, 5 people, accounting for 31%, predict that prices will decrease. The remaining three experts believe that the market may move sideways.
On the side of individual investors, the online survey with 79 people, the results are similar to professional analysts. 36 small investors, equivalent to 46%, expect gold prices to increase next week, while 24 people (30%) forecast prices to decrease. The rest, including 19 investors, accounting for 24%, believe that gold prices will fluctuate in a narrow range.
Notable economic data for next week
After a week in which central banks dominated the economic news schedule, the market entered the new week with a series of important data from the US, in which the April jobs report of the world's largest economy is considered the focus.
On Tuesday morning, the Institute for Supply Management will release the US Service PMI (ISM Services PMI). Investors are monitoring whether the US service sector shows signs of weakening similar to the manufacturing sector, after previously released negative data. In addition, the market is also paying attention to JOLTS job opportunity data of the US and new home sales in the US in February and March.
By Wednesday, the private sector employment report of ADP (ADP Employment) - an early indicator of the US labor market - will be released, thereby helping to predict the developments of non-farm payrolls. Next, the weekly US jobless claims released on Thursday morning will provide more signals about the health of the labor market.
The week's data series closed on Friday morning with the US April jobs report, before the University of Michigan released the May Preliminary Consumer Confidence Index - an important measure reflecting US consumer sentiment before economic prospects.
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