Looking back at world gold prices last week
Gold prices recorded their third consecutive week of gains as concerns about the US's ability to maintain public debt, the weakening USD and the unexpected expansion of the US Treasury Department's long-term bond repurchase program helped the precious metal break through the 4,600 USD/ounce mark.
Spot gold opened the week at 4,381.12 USD/ounce on Sunday evening (US time), then continued to rise in the first session of the week as investors maintained buying power from the previous recovery.
However, the upward momentum slowed down on Tuesday as long-term US Treasury bond yields rose and the USD maintained its strength. Spot gold prices then fell to a weekly low, to 4,324.49 USD/ounce in the early morning of Wednesday.
A turning point appeared just hours later when the US Treasury Department announced the doubling of the scale of 10--30 year government bond repurchases, to at least 4 billion USD per repurchase. This move caused long-term bond yields to decrease in the short term, while increasing concerns about the sustainability of US public debt as total national debt approached the $40,000 trillion mark.
After the above information, the USD weakened, prompting cash flow to flock to safe haven assets such as gold. Precious metal prices quickly surpassed the $4,500/ounce mark.
The upward momentum continued to be strengthened on Wednesday afternoon after the minutes of the July meeting of the US Federal Reserve (Fed) showed that policymakers were still focused on inflation, but the possibility of the Fed continuing to raise interest rates in the near future is not high.
In Thursday's session, gold prices maintained above the threshold of 4,500 USD/ounce. In the last session of the week, precious metals continued to accelerate as concerns about the US fiscal policy, the weakening USD and increased demand for precious metals overwhelmed the impact from the US Purchasing Managers' Index (PMI) data, which was more positive, and bond yields rebounded.
Spot gold prices set a weekly high of 4,632.14 USD/ounce on Friday afternoon and ended the trading week above the 4,600 USD/ounce mark.
This development shows that optimistic sentiment is prevailing in the gold market. Investors are currently focusing on monitoring new signals from the Fed's monetary policy, views of key candidates such as Kevin Warsh and data on the Personal Consumption Price Index (PCE) - an inflation measure of particular interest to the Fed - to assess the next direction of gold prices.
Gold price forecast for next week
The latest weekly gold survey by a precious metals website shows that the pessimistic sentiment on Wall Street almost disappeared after the sharp increase in gold prices in the last sessions of the week. Meanwhile, the optimistic sentiment of individual investors continued to rise, bringing gold price expectations into a positive zone.
In this week's survey, 11 experts on Wall Street participated in assessing gold price prospects. 8 experts, equivalent to 73% of participants, predict that gold prices will continue to rise in the next trading week. The remaining three experts, accounting for 27%, believe that gold prices may enter a accumulation phase after the recent strong increase.
Notably, no experts predict gold prices will decrease next week.
In the group of individual investors, Kitco's online survey results with 211 votes also showed increased optimism after the impressive performance of gold.
There are 164 small investors, equivalent to 78% of participants, expecting gold prices to continue to increase next week. Meanwhile, 25 people, accounting for 12%, predict gold prices will decrease. The remaining 22 investors, equivalent to 10%, believe that the precious metal will move sideways in the next 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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