World gold price movements last week
Gold prices experienced a week of strong fluctuations with three distinct phases. This precious metal fell sharply at the beginning of the week due to concerns about inflation due to rising oil prices and yield risks overwhelming safe-haven demand.
After that, the price gradually stabilized as tensions related to the Strait of Hormuz did not escalate further. By the second half of the week, gold prices rebounded to surpass the 4,700 USD/ounce mark thanks to expectations of cooling down the conflict, falling bond yields and weakening the USD.
Spot gold prices opened the week at 4,623.36 USD/ounce. Although the market is still affected by tensions in the Strait of Hormuz, gold prices fell back to the mid-range of 4,500 USD/ounce in the morning session on Monday.
This development shows that investors at that time considered the US-Iran conflict mainly as a factor promoting inflation rather than supporting safe-haven assets. Rising oil prices, high bond yields and a solid USD have put pressure on gold.
On Tuesday, gold prices stabilized around the 4,500 USD/ounce range. Many experts believe that gold has stopped falling even though geopolitical risks are still present, creating a foundation for a mid-week recovery as the interest rate environment and the USD become more favorable.
Wednesday's session recorded the clearest breakthrough in the week. Spot gold prices at one point increased by 3.6%, firmly surpassing the 4,700 USD/ounce mark as expectations of the US and Iran reaching an agreement to help cool down inflation concerns due to oil prices.
At the same time, falling bond yields and weakening USD further supported gold prices. This is considered the most favorable period for precious metals in the past week.
By Thursday, the upward momentum continued to be maintained. Spot gold prices fluctuated in the range of 4,696.50-4,743.81 USD/ounce before closing the session near 4,740.47 USD/ounce.
The market at this time is no longer just recovering after the sell-off at the beginning of the week but is beginning to consolidate the upward trend above the 4,700 USD/ounce threshold before the US announces important economic data.
The last session of the week was mainly a period of accumulation instead of reversal to decrease. Gold prices fluctuated in the range of 4,677.90-4,750.40 USD/ounce and closed around 4,716.20 USD/ounce. The US April jobs report showed that the economy created 115,000 jobs, while the unemployment rate remained at 4.3%, reducing expectations that the US Federal Reserve (FED) would soon cut interest rates.
However, the consumer confidence index of the University of Michigan dropped to 48.2, which contributed to supporting gold prices to maintain stable momentum until the end of the week.
Gold price forecast for next week
Weekly gold survey results show that both Wall Street analysts and individual investors are returning to place positive expectations on gold prices next week, after the precious metal maintained a fairly solid recovery momentum.
This week, 11 experts participated in a Kitco News survey. 7 experts, equivalent to 64%, predict that gold prices will continue to rise next week. Only 1 person, accounting for 9%, believes that gold prices may decrease. The remaining three experts, equivalent to 27%, predict that the market will enter a phase of accumulation or sideways.
In the group of individual investors, Kitco's online survey attracted 153 participants. The results showed that the psychology of small investors continued to agree with Wall Street experts.
There are 106 people, equivalent to 69%, predicting gold prices will increase next week. Meanwhile, 27 investors, accounting for about 18%, believe that the precious metal may decline. The remaining 20 people, equivalent to 13%, expect gold prices to move sideways in the short term.
Notable economic data for next week
US announces existing home sales.
The US announces the consumer price index (CPI); The US Senate is expected to vote on the nomination of Mr. Kevin Warsh to the position of Chairman of the US Federal Reserve (FED).
US announces producer price index (PPI).
US announces weekly jobless claims and retail sales.
Announcing the Empire State Manufacturing Survey (survey on manufacturing activities in New York State - USA).
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