Looking back at world gold prices last week
World gold prices closed the shortened trading week in the US with more positive developments, as a series of signals from the labor market, the USD and monetary policy views of the US Federal Reserve (Fed) simultaneously supported investor sentiment. After repeatedly falling to test the area below 4,000 USD/ounce, the precious metal has rebounded and re-established the 4,100 USD/ounce mark.
Right from the beginning of the week, spot gold opened around 4,009.50 USD/ounce on Sunday evening. However, the upward momentum did not last long. In the first two sessions of the week, gold prices were under pressure and at times retreated to near the psychological support level of 4,000 USD/ounce.
US economic data released later continued to make the market cautious. The JOLTS May report showed that the number of job positions reached 7.6 million, while the number of newly recruited workers was at 5.2 million, almost unchanged. At the same time, the ISM manufacturing index in June still stood in an expanding range at 53.3%, raising debate about the possibility that the Fed still has room to maintain a tough policy stance.
This pressure caused gold prices to fall to the week's lowest level at 3,941.87 USD/ounce in the third session. However, the low price zone quickly activated bottom-fishing buying, helping the market gradually regain balance.
On Wednesday, the recovery trend became clearer after ADP announced that the US private sector created 98,000 jobs in June. In addition, Fed Chairman Kevin Warsh said that inflation risk has somewhat eased, but did not give clear signals about the next step of interest rate policy.
These developments help investors reduce concerns about the possibility of the Fed raising interest rates soon. Gold prices thereby surpassed the 4,100 USD/ounce mark again, while traders adjusted their positions before the June non-farm payroll report was released early on Thursday.
The biggest highlight of the week came from the US jobs report. The number of non-farm jobs in June only increased by 57,000, much lower than expected, while the unemployment rate remained around 4.2%. Weaker than forecast data pulled the USD down, while reducing pressure from US Treasury bond yields.
Thanks to this support, gold prices continued to expand their gains and at one point touched 4,143.60 USD/ounce - the highest level of the week. Before the US market closed for National Day holiday, spot gold prices fluctuated around 4,120 USD/ounce.
With the above developments, the precious metal has ended its weekly decline and recorded the strongest weekly increase since the end of May. This development shows that gold still receives significant support whenever US economic data signals weakening, especially in the context that the market continues to closely monitor the monetary policy orientation of the Fed.
Gold price forecast for next week
The latest week's gold price survey results show that optimistic sentiment has returned to both Wall Street analysts and individual investors, after gold prices regained the 4,100 USD/ounce mark before the long US Independence Day holiday.
This week, 16 experts participated in the survey. Most Wall Street experts turned to a positive view after gold prices ended a 4-week consecutive decline.
11 experts, equivalent to 69%, predict that gold prices will continue to increase next week. Only 2 people, accounting for 13%, believe that precious metal prices may decrease. The remaining three experts, equivalent to 19%, predict that gold prices will remain flat.
Meanwhile, the online survey recorded 183 votes from individual investors. 99 investors, equivalent to 54%, expect gold prices to increase next week.
Conversely, 45 people, accounting for 25%, predicted gold prices would decrease. The rest, including 39 investors, equivalent to 21%, believe that gold prices will accumulate and move sideways next week.
In the short term, gold prices may continue to fluctuate in line with signals from the US economy, especially jobs data and Fed monetary policy expectations. A weaker-than-expected payrolls report has weakened the USD, reducing concerns that the Fed will continue to raise interest rates, thereby supporting gold recovery.
However, the upward momentum may still be limited if US bond yields rebound or the market adjusts interest rate expectations. In addition, geopolitical tensions and gold buying activities by central banks are also factors supporting safe-haven sentiment.
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