World gold prices are facing the possibility of falling or moving sideways in the short term as the recent upward momentum shows signs of slowing down, while cash flow in the international market is tending to shift to more risky assets such as stocks.
Some experts believe that although gold still has supporting factors in the medium and long term, this precious metal in the current period is difficult to break through strongly, and may even continue to be under adjustment pressure at important resistance areas.
Darin Newsom - senior market analyst at Barchart. com, is the one who gives a clear pessimistic view when forecasting gold prices to fall. According to him, June gold futures are touching the 50-day moving average around 4,938.50 USD but have not been able to surpass this technical indicator since March 18.
Newsom also noted that the stochastic daily indicator shows gold is in an overbought state, with reading levels near or above 90%.
This often reflects that there is not much room for increase in the short term and the risk of adjustment is increasing. Although he himself also admits that the gold market at this time is strongly affected by news and psychological developments rather than purely technical models, the general assessment is still that downward pressure is present.
Sharing the same cautious view, Alex Kuptsikevich - senior market analyst at FxPro, said that gold is recovering slowly but not enough signals to establish a new upward momentum.
According to him, gold prices have approached the 4,900 USD zone - an area coinciding with the 50-day moving average - but this is an easy threshold to trigger selling pressure. Kuptsikevich warned that the market may experience a reaction in the style of "buying according to rumors, selling when the truth is confirmed", especially when geopolitical tensions show signs of cooling down. He emphasized that although the long-term upward trend of gold has not been completely denied, the upward speed has slowed down significantly.
Notably, this expert believes that the more likely scenario is that the price is sold off from the 4,900 USD zone, thereby confirming that the upward trend has been broken in the short term.
Meanwhile, Daniel Pavilonis - senior commodity broker at RJO Futures, does not completely lean towards a deep decline, but believes that gold is likely to move sideways or be less active in the near future.
According to him, markets are currently in a "risk-loving" mentality, reflected in the fact that stocks have rebounded quite strongly, while the recovery momentum of precious metals is not too outstanding. Pavilonis believes that gold is no longer the most attractive focus for speculative cash flow as before, because more attention is focused on the stock market.
Although he does not rule out the possibility that gold and silver will attract renewed interest in the near future, at the present time, the precious metal is still standing "in the shadow" of stocks. This means that gold prices are unlikely to increase sharply immediately, instead they may move sideways to accumulate or endure short-term corrections.
Another notable perspective comes from Adam Button - Head of Currency Strategy at Forexlive. com. Although in the long term he still appreciates the prospects of gold, in the short term, Button admits the market is witnessing downward pressure as gold becomes "peaceful trading".
According to him, in the context of cooling tensions, two factors putting pressure on gold prices are the activity of reducing leverage in crowded buying positions and the fact that some emerging markets are selling gold to protect the domestic currency or balance energy import costs.
These factors make it impossible for gold prices to rise immediately, and at the same time show that the market may continue to fluctuate in a state of stalemate before establishing a clearer trend.
Overall, assessments from analysts show that the short-term outlook for gold prices is not really bright. Important technical resistance levels have not been conquered, the rate of price increase has slowed down, and cash flow in the international market is prioritizing risky assets.
In that context, gold may continue to decrease slightly or move sideways in the first trading sessions of the week, instead of soon returning to a strong upward cycle like the previous period. For investors, this is considered a time to carefully observe the price reaction around the 4,900 USD/ounce range before expecting a new breakthrough.
