Looking back at world gold prices last week
World gold prices have just experienced a disappointing trading week. US inflation data cools down and Treasury bond yields fall only provide limited support, while US-Iran tensions, sharp oil prices and positive economic data continue to put pressure on precious metals.
Spot gold opened the week at 4,108.18 USD/ounce on Sunday evening (US time). However, the precious metal quickly put pressure as tensions related to Iran and the Strait of Hormuz escalated, pushing oil prices up sharply and raising concerns that energy inflation could cause the US Federal Reserve (Fed) to maintain a cautious stance.
Gold prices at one point rose to a week-high of 4,122.63 USD/ounce in Monday's trading session. However, the upward momentum quickly weakened as the USD maintained its strength, while traders remained cautious about stepping up buying safe-haven assets.
Precious metals received partial support in Tuesday's session after the US consumer price index (CPI) in June fell to 3.5%, lower than forecast. This data contributed to easing concerns about the possibility of the Fed raising interest rates soon.
Gold prices then recovered to above the threshold of 4,050 USD/ounce. However, the increase slowed down on Wednesday as the US producer price index showed that inflationary pressure was still present, causing bond yields to remain high and hindering gold's recovery.
Selling pressure increased on Thursday after US retail sales were more positive than expected, reinforcing the notion that the Fed will continue to maintain tight monetary policy. Meanwhile, new tensions between the US and Iran pushed crude oil prices higher, raising concerns about inflation.
Spot gold prices broke through the 4,000 USD/ounce mark and fell to the week's lowest level of 3,959.37 USD/ounce on Friday. Buying activity in the low price range then helped gold prices recover slightly.
After failing to regain the 4,050 USD/ounce threshold, spot gold closed the week at 4,017.3 USD/ounce. This development marked another week of price decline for the precious metal.
Gold price forecast for next week
A recent survey by a precious metals website with 14 Wall Street experts shows a strong downward trend towards price forecasts.
Only one expert, equivalent to 7% of participants, predicts gold prices will increase next week. Meanwhile, 11 experts, accounting for 79%, predict that precious metal prices will continue to decrease. The remaining two experts, equivalent to 14%, believe that gold prices may remain flat.
In the online survey for individual investors, a total of 169 votes were recorded. The sentiment of this group also became more cautious after gold prices went down for another week.
There are 68 investors, equivalent to 40%, expecting gold prices to increase next week. Conversely, 61 people, accounting for 36%, forecast that precious metal prices will decrease. The remaining 40 investors, equivalent to 24%, believe that the market will enter an accumulation phase next week.
Economic data affects gold prices next week
After a busy week with a series of important economic indicators and hearings related to the US Federal Reserve (Fed), next week is forecast to be one of the weeks with fewer data. This may make the market more sensitive to new information and geopolitical developments.
Traders will have to wait until Thursday morning to welcome a notable economic event, when the European Central Bank (ECB) announces its monetary policy decision. After that, ECB President Christine Lagarde will chair a press conference. Currently, the market forecasts that the ECB will keep interest rates unchanged this month.
On the same day, the market will also receive weekly reports on the number of initial jobless claims in the US.
By Friday, traders will follow the preliminary Purchasing Managers' Index (PMI) for July released by S&P Global, followed by the US new home sales report in June.
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