After a strong increase on Tuesday evening, gold prices have cooled down significantly as they entered the weekend. Investors took profits as the US dollar and bond yields attracted attention again.
Although gold is being sold for profit and is going through a necessary adjustment period, many experts believe that this week's price peak is not the highest level of the year.
Jesse Colombo, an independent precious metals expert, said this was a healthy adjustment, and he expected prices to fluctuate in the summer, holding steady around $3,000/ounce. I believe gold is still in the early stages of its uptrend. Adjustment is normal even in strong bullish markets, he said.
Selling pressure increased as concerns about the global economy eased. Some economists believe that economic instability has reached its peak. Adam turnquist, technical strategist at LPL Financial, said that advances in trade negotiations have helped change the story from fear of high tariffs to hopes of tax cuts.
Kelvin Wong - an expert at OANDA, said that the gold rally is not over. He forecasts gold's next resistance at $3,670-3,750 and $3,890 an ounce.
Lukman Otunuga - an expert at FXTM - said that the current selling pressure at profit does not change the factors supporting gold. Big data from the US next week such as GDP, inflation, and employment will affect expectations of a Fed rate cut, thereby affecting gold prices.
If gold prices fall below $3,250/ounce, they could fall further to $3,170. Conversely, if it stays above $3,250/ounce, gold could increase back to $3,390-3,500/ounce.
US employment data will be the focus next week, when the April employment report will show the impact of tax policy and tighten spending on the labor market.
However, not everyone is optimistic about gold. Philip Strieble - strategist at Blue Line Futures - believes that investors should pay more attention to silver, because if market instability has reached its peak, silver will have a great opportunity. He predicted that recovering industrial demand will boost silver prices.
The gold- silvery ratio this week peaked at 107, but after the decline in gold prices, this ratio decreased sharply, expected to end the week at 99.
Important economic data next week
Monday: Federal election in Canada
Tuesday: New Employment ratio (JOLTS) and US Consumer Confidence Index
Wednesday: ADP Employment Report, Preliminary Q1 GDP, Waiting for Selling Housing Contracts in the US; Japanese Central Bank monetary policy meeting
Thursday:Weekly jobless claims and US Manufacturing Purchase Management Index (ISM Manufacturing PMI)
Friday: Non-farm Payrolls Report in the US
