Looking back at world gold prices last week
Gold prices recovered strongly in a volatile week, as selling pressure at the beginning of the week due to rising oil prices, US Treasury bond yields approached 5% and expectations of the US Federal Reserve (Fed) raising interest rates gradually cooled down after the interest rate hike decision was announced.
Spot gold opened the trading week at 4,340 USD/ounce on Sunday evening (US time). However, the precious metal quickly fell under pressure as traders adjusted expectations amid rising inflation risks due to rising crude oil prices and escalating US-Iran tensions.
The sell-off continued in Monday and Tuesday, causing gold prices to fall to their lowest level in more than a month, around 4,279.30 USD/ounce on Tuesday, as the market became increasingly certain that the Fed would implement an interest rate hike this week.
Gold tried to stabilize in Wednesday's session before the Fed announced its monetary policy decision. However, the recovery momentum did not last after the Federal Open Market Committee (FOMC) unanimously voted 12-0 to raise interest rates by another 0.25 percentage points, bringing the target interest rate margin to 3.75-4%.
Fed updated forecasts show that 16 out of 18 officials still expect another wave of interest rate hikes before the end of the year. After this information, spot gold prices turned down and set a weekly low of 4,261.80 USD/ounce on Wednesday afternoon.
On Thursday, gold prices regained momentum as crude oil prices fell, the USD weakened and US Treasury bond yields cooled down, helping investors reduce selling pressure after the Fed meeting.
The upward momentum continued to expand in the last session of the week as oil prices fell for the third consecutive session, while bond yields retreated from the week's peak. These factors created conditions for gold prices to rise to the week's highest level of 4,400.60 USD/ounce.
After adjusting down from the session's peak, spot gold prices entered the weekend holiday around 4,377 USD/ounce. Overall in 5 sessions, the precious metal still recorded an increase and ended a three-week consecutive decline.
This development shows that the gold market is reacting strongly to changes in US monetary policy expectations, along with intertwined impacts from the USD, bond yields, energy prices and geopolitical risks.
Gold price forecast for next week
The latest weekly gold survey by a precious metals website shows that Wall Street analysts completely lean towards an upward trend after the gold price increase after the US Federal Reserve (Fed)'s interest rate decision.
This week, 16 experts participated in the survey. All 16 experts, equivalent to 100% of the survey participants, predict that gold prices will continue to increase in the next trading week.
Meanwhile, Kitco's online poll attracted 220 votes from individual investors. The results showed that the side predicting gold price increases continued to dominate.
There are 127 individual investors, equivalent to 58%, expecting gold prices to increase next week. Conversely, 52 people, accounting for 24%, predict gold prices will decrease. The remaining 41 investors, equivalent to 19% of the total participants, believe that gold prices will remain flat in the upcoming trading week.
The article only reflects market developments and opinions, forecasts, not investment recommendations. Investors need to consider carefully before making a decision.
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