Gold price may reach 5,000 USD, even if adjusted, it will only be temporary

Mr. Kevin Grady - Chairman of Phoenix Futures and Options - said that although the current increase in gold seems difficult to maintain, strong cash flow is still supporting the market and ready to buy when prices adjust.

Last month, we saw investment cash flow starting to return. The GLD gold ETF has increased by 880% compared to the same period last year. Of course, that increase is unsustainable, he said.

Mr. Grady predicted: I believe gold will reach 5,000 USD/ounce. Prices can be adjusted, but even a decrease to $4,000/ounce is only a small change.

Mr. Grady emphasized the need to pay attention to who is looking to sell gold. In the energy market, when oil reaches $90/barrel, manufacturers will start selling to prevent risks. But that is not the case with gold. Manufacturers will not rush to stop this increase. They are benefiting from high stock prices and positive feedback from shareholders, so I think the gold rally will continue.

When asked when gold could surpass the $5,000/ounce mark, Mr. Grady laughed and said who knows, next week. Although it is a bit humorous, he emphasized that investment cash flow is flowing strongly into the market. When the S&P index rose 12% but gold surged to 50%, that was enough to attract a large number of new investors and this rally showed no signs of stopping, he said.

He said the retail market is very vibrant: Many people are talking about gold. This week I received more calls from friends and customers - more than in previous years. The story of gold has returned to the mainstream. Many people are choosing GLD (transaction code of SPDR Gold Shares - ETF) as an investment channel in mutual funds. Therefore, it is difficult to predict when the market will adjust, because we have not seen any significant declines.

Given the current context, as many countries are looking to gradually separate from the US dollar, this devalued currency is adding to the upward momentum of gold. Everything is converging for a new uptrend, he added.

However, Mr. Grady said that the factor that could cause gold to " cool down" is if a positive turning point in the Russia-Ukraine conflict occurs. Right now, that is the only factor that can have a strong impact. We are still monitoring the interest rate situation, expecting another cut this month, and economic data to be released soon. But only reconciliation in the Ukrainian war can be enough to reverse the trend, he said.

Meanwhile, Mr. James Stanley - senior strategist at Forex.com predicted that gold prices could increase in the short term: "There is a clear correction before the market closes at the end of the week, I think that will help relieve most of the profit-taking pressure. I expect the support zone to appear soon early next week.

The current rally is so strong that the only doubt is that it is happening too fast, he added. Therefore, I still maintain a positive view until there are clearer signs of reversal".