Gold prices weaken, under pressure from energy prices
World gold prices closed the trading week in a weakening state as they were under pressure from rising energy prices, raising concerns about inflation and making global monetary policy more cautious.
In the context of the conflict in Iran continuing to disrupt oil supply, especially the fact that the Strait of Hormuz cannot be fully reopened, the global energy market still faces the risk of shortage. This causes oil prices to remain at a high level, leading to widespread inflationary pressure.
Recorded in the most recent session, spot gold prices fluctuated around the threshold of 4, 613.4 USD/ounce, almost sideways during the day but decreased by about 2% compared to the end of last week. This development shows that the precious metal is gradually losing its shelter role as investors shift their attention to interest rate prospects.
Mr. Lukman Otunuga - senior market strategist at FXTM - said that gold prices may continue to face difficulties next week as geopolitical tensions show no signs of cooling down. "Despite the ceasefire agreement, the fact that the Strait of Hormuz is still closed makes the market worried that oil prices may remain at a three-digit level, which is detrimental to gold," he said.
Sharing the same view, Mr. Philip Streible said that the focus of the market is no longer economic data but the diễn biến of inflation. "As long as oil flows are not unlocked, investors will continue to focus on inflation risks. At that time, the central bank will find it difficult to make a clear decision," he said.
Last week, the US Federal Reserve (Fed) kept interest rates unchanged as expected. Chairman Jerome Powell said that the agency is not in a hurry to change its policy stance, in the context of increasing incertitude. The market currently does not expect the Fed to cut interest rates soon this year, although the possibility of raising interest rates has not been raised.
The downward momentum is a buying opportunity
Although short-term prospects are still challenging, Mr. Michael Brown - an expert at Pepperstone - believes that gold corrections may be buying opportunities. He emphasized that demand from central banks, especially in emerging economies, is still a long-term support factor for gold prices.
Technically, the 4,600 USD/ounce threshold is considered an important psychological milestone. If it is broken, gold prices may retreat to the 4,450 USD or lower range. Conversely, if it remains above this mark, the market may head towards the 4,700 - 4,750 USD/ounce range in the near future.
In the coming week, investors will monitor a series of US economic data such as ISM services, the ADP jobs report, the number of unemployment claims and the non-farm payroll. However, experts believe that this information is likely still overshadowed by the developments of the energy market and the risk of global inflation.
