Looking back at world gold prices last week
Gold prices experienced another week of volatility. Bottom-fishing buying and cooling inflation data helped the precious metal protect the 4,000 USD/ounce mark, while the tough stance of the US Federal Reserve (Fed), increased Treasury bond yields and inflation concerns due to rising oil prices limited the recovery momentum.
Spot gold prices opened the week at 4,051.51 USD/ounce on Sunday evening (US Eastern time) and continued to increase on Monday, as traders pushed up buying as prices weakened to lows in the recent range.
The upward momentum slowed down on Tuesday, as the market became cautious in the face of the Fed's interest rate decision. Oil prices remained high along with persistent concerns about inflation continuing to support bond yields.
On Wednesday morning, gold prices fell below 4,050 USD/ounce and at one point lost the support level of 4,000 USD/ounce. Spot gold prices then set a weekly low at 3,995.90 USD/ounce.
Precious metals recovered before the Fed decided to keep interest rates unchanged in the range of 3.50-3.75%. However, the fact that 3 members disagreed and supported interest rate hikes did not bring many positive signals about the possibility of policy easing. Buyers became cautious as traders assessed the latest Fed message and adjusted positions ahead of upcoming inflation data.
The strongest recovery appeared on Thursday, after the price index of personal consumption (PCE) was lower than expected, helping to ease concerns about the possibility of the Fed raising interest rates. This development pushed gold prices back above the threshold of 4,100 USD/ounce.
Spot gold prices set a weekly high of 4,119.82 USD/ounce at noon on Thursday. However, the upward momentum weakened in Friday's session, after the US job costs index was slightly higher than forecast, pulling Treasury bond yields up and putting pressure on precious metal prices at the end of the session.
After failing to maintain above the 4,100 USD/ounce threshold, spot gold was traded for the last time at 4,041.7 USD/ounce on Friday afternoon. Overall for the week, gold prices were almost flat but still slightly decreased.
Gold price forecast for next week
The latest weekly gold survey by a precious metals website shows that Wall Street analysts are divided between viewpoints of price increase, price decrease and neutrality. Meanwhile, the psychology of individual investors has left the optimistic zone after gold prices continued to fail in their breakthrough efforts.
Among 17 Wall Street experts, 5 experts, equivalent to 29%, predict that gold prices will increase next week. Six others, accounting for 35% of the total, believe that gold prices will decrease. The remaining six experts predict that the precious metal will continue to fluctuate sideways next week.
Meanwhile, Kitco's online poll recorded 184 votes. Individual investors no longer maintained their majority optimism after gold prices continued to be stuck in recent fluctuations.
87 individual traders, equivalent to 47%, expect gold prices to increase next week. Meanwhile, 55 people, accounting for 30%, forecast that the precious metal will decrease in price. The remaining 42 investors, equivalent to 23%, believe that gold prices will continue to accumulate next week.
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