Looking back at world gold prices last week
The gold market has just experienced a volatile week when supporting and pressing factors are constantly intertwined. Instability in the Middle East and buying pressure at low prices help the precious metal have times of recovery, but it is not enough to resist pressure from US Treasury bond yields, the USD and inflation concerns.
Spot gold prices started the week at 4,175.71 USD/ounce. Concerns related to the US-Iran conflict and the risk of disrupting traffic through the Strait of Hormuz quickly triggered safe-haven demand, bringing gold prices to a week-high of 4,202.67 USD/ounce on Monday.
However, the upward momentum did not last long. Oil prices remaining at a high level increased concerns that inflation could continue to cause difficulties for the Fed's monetary policy management process. In that context, expectations that this agency maintains a cautious stance on interest rates have become a drag on gold.
Downward pressure became more apparent in the next two sessions. Gold prices broke through the 4,100 USD/ounce mark as investors shifted their attention to the minutes of the FOMC's June meeting.
The minutes show that inflationary pressure is still a major concern for US policymakers. Some officials even support immediate interest rate hikes, while many other members believe that the Fed may have to continue raising interest rates if persistent inflation is not controlled.
The tough signals from the Fed, combined with increased bond yields and a stronger USD, caused gold prices to fall sharply. The precious metal at one point retreated to 4,021.76 USD/ounce on Wednesday, the week's lowest level.
By Thursday, gold prices showed a recovery momentum when the number of weekly jobless claims in the US reached 215,000, slightly lower than forecast. The weakening USD also created more support for the market, while investors re-evaluated the possibility of the Fed raising interest rates in July.
However, buying power is still not strong enough to push gold through the 4,140 - 4,150 USD/ounce range. New tense developments between the US and Iran continue to support oil prices, thereby maintaining concerns about inflationary pressure and limiting the recovery momentum of precious metals.
Closing the trading week, spot gold price stood at 4,120.67 USD/ounce. The increase at the end of the session helped the price maintain above the psychological level of 4,100 USD/ounce, but for the whole week, the precious metal still lost more than 1.4%.
Gold price forecast for next week
The short-term outlook for gold prices remains unpredictable as both analysts and individual investors are divided on the trend for next week.
Among the 13 experts participating in the survey, 5 people, equivalent to 38%, predicted gold prices would increase. 3 experts, accounting for 23%, said prices would decrease, while the remaining 5 people, equivalent to 38%, predicted the market would continue to move sideways.
Cautious sentiment also appeared in the group of individual investors. Among the total of 282 people participating in the online survey, 117 people, equivalent to 42%, expect gold prices to increase next week. 108 people, accounting for 38%, forecast prices to decrease, and 57 people, equivalent to 20%, believe that the market will continue to accumulate.
This result shows that optimism about gold is weakening, while the market has not yet formed a clear trend. Investors continue to monitor factors such as interest rate policy, USD, bond yields and geopolitical developments to determine the next direction of gold prices.
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