World gold prices have just experienced strong fluctuations when at one point falling below the important support zone, before recovering again. Most Wall Street experts predict positively about gold prices this week. However, some experts believe that the short-term trend of precious metals is still not really clear, and even potentially deeply decreasing if selling pressure increases.
Alex Kuptsikevich - senior market analyst at FxPro - predicts gold prices may fall next week. According to him, gold prices have fallen below 4,400 USD/ounce, at one point hitting the lowest level since the prolonged decline in March. In the session, prices even retreated below the 200-day moving average - a technical zone that has repeatedly attracted buying in the past 3 years.
However, Mr. Kuptsikevich believes that the current context is different from the recovery in March. At that time, the market fell into a clear oversold state, but now trading conditions have become more balanced. This makes the recovery from the 4,400 USD zone to over 4,500 USD/ounce not enough basis to confirm that the upward trend has returned.
According to FxPro experts, if gold prices break the current support zone, the precious metal may retreat to the 4,000-4,100 USD/ounce area. In case of stronger selling pressure, the decline may be even deeper, even heading towards the 3,400 USD/ounce zone. However, he also noted that the market may be stuck around the current price range for a few days to a week to accumulate after the previous decline.
Sharing the same cautious view, experts at CPM Group recommended selling, with the initial target being 4,375 USD/ounce in the period from May 29 to June 12, the stop loss level at 4,610 USD/ounce. This analysis group believes that gold and other major precious metals are moving in a very short-term downward trend, continuously testing support zones.
According to CPM Group, if gold prices break the 4,400 USD/ounce mark, the market may see a new wave of selling, pulling prices back to the 4,100 USD/ounce mark. The fact that the Comex gold contract for June has largely been moved to August also reduces part of the price support pressure, thereby opening up the possibility that gold will have another correction phase.
CPM Group believes that investor excitement with gold has somewhat cooled down. Economic conditions are no longer seen as as serious as a few months ago, while domestic and foreign political factors, although still potentially risky, are entering a period of temporary silence. This development has caused a part of investors to take profits, while reducing short-term buying power.
Meanwhile, Bob Haberkorn - senior market strategist at StoneX - believes that gold and silver may continue to move sideways or slightly decrease in the short term, although long-term prospects have not been denied. According to him, the market has seen concerns that some central banks need liquidity and sell gold, including Turkey, along with information that Russia sold part of the gold last week.
Mr. Haberkorn assessed that gold prices still maintained important support zones, which is a positive sign. However, in the context of the market being dominated by a series of conflicting information related to geopolitics and monetary policy, trading with high confidence becomes very difficult.
The most important thing when trading precious metals at this time is patience" - Mr. Haberkorn said. According to expert StoneX, investors need to wait for more clear signals from the US Federal Reserve (Fed), especially the direction of interest rate policy in the coming time.
CPM Group also believes that, although any risk factors can quickly worsen and trigger gold buying again, in the present time the precious metal seems to be in a state of accumulation. This shows that the market has not completely leaned towards a strong upward or downward trend, but still largely depends on US economic data, geopolitical developments and interest rate expectations.
