Looking back at world gold prices last week
Gold prices rebounded in a volatile trading week. Bottom-fishing buying and falling US bond yields helped gold recover after a long slide below 4,000 USD/ounce earlier this week. However, gold's upward momentum could not go far because the US job market is still good, the USD is holding its value and the fear of inflation remains.
Opening the Sunday evening session, spot gold price was at 4-15.83 USD/ounce. However, prices quickly fell as investors worried about rising energy costs, US-Iran tensions, and the possibility that the US Federal Reserve (Fed) will keep interest rates high for longer.
Selling pressure extended to Monday, pushing gold prices to the bottom of the week at 3,982.32 USD/ounce, before bottom-fishing buyers appeared.
On Tuesday and Wednesday, gold prices recovered steadily due to falling US bond yields from peak levels and weakening the USD, helping gold rebound to the 4,100 USD/ounce mark.
The upward momentum became even stronger when the market paid less attention to the European Central Bank (ECB) maintaining interest rates, but only focused on falling oil prices (helping to ease inflation concerns). As a result, spot gold peaked the week at 4,165.71 USD/ounce right before noon on Wednesday.
However, the recovery momentum ended on Thursday. The reason is that the number of Americans applying for unemployment benefits suddenly decreased to only 187,000 people - the lowest level in decades.
This figure shows that the US labor market is still very strong, giving the Fed reason to continue to maintain a tough policy to curb inflation. Gold fell below the 4,100 USD/ounce mark again due to the strengthening USD and investors actively trading cautiously before the Fed's interest rate meeting next week. The only solid foundation keeping gold from falling further is the ongoing instability in the Middle East region.
By Friday, gold prices went sideways and could not regain the 4,100 USD/ounce mark, finally closing the week at 4,051.7 USD/ounce. In general, although gold prices closed the week up compared to the opening, in reality they are still only stuck in the recent average price range.
Gold price forecast for next week
Results from a recent prestigious weekly gold survey show that financial experts (Wall Street) are showing pessimistic or hesitant views on the short-term outlook of gold prices. In contrast, the psychology of individual investors (Main Street) is much more optimistic after this precious metal once again successfully defended the support level of 4,000 USD/ounce.
This week, the survey attracted the participation of 18 analysts. The general psychology of this group mainly leans towards a downward trend and uncertainty after the unpredictable fluctuations of gold in recent times.
Only 4 experts (accounting for 22%) expect gold prices to break through next week, while up to 7 people (equivalent to 39%) predict prices will fall. The remaining group of 7 experts believes that this precious metal will continue its sideways trend and cannot create a breakthrough.
Meanwhile, the results from an online poll with 249 votes show that individual investors are placing a lot of faith in the recovery momentum of gold as the 4,000 USD/ounce mark continues to stand firm.
Up to 147 small investors (accounting for 59%) believe that gold prices will go up next week. Only 48 people (accounting for 19%) predict that prices will lose momentum and go down, along with the remaining 54 investors (equivalent to 22%) who believe that the market will continue its accumulation and sideways state in the coming days.
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