World gold prices entered a new trading week with strong upward momentum after surpassing 4,600 USD/ounce. Investors are waiting for monetary policy signals from the Fed, especially Chairman Kevin Warsh's speech at Jackson Hole.
Gold prices have had their third consecutive week of increase and increased by more than 5% in the past week. According to data quoted by RIA Novosti, December gold futures contracts on the Comex exchange increased by 74.21 USD, equivalent to 1.65%, to 4,645.61 USD/ounce. In the session, gold prices for the first time since May 15 surpassed the 4,600 USD/ounce mark.
Gold's upward momentum has lasted for three consecutive weeks, while since the beginning of the month, the precious metal has increased by about 13%. The market's momentum is strengthened by the weakening USD, volatile US bond yields and cash flow returning to precious metal assets.
Next week, the focus of the gold market will shift to the Jackson Hole thematic conference, where Fed Chairman Kevin Warsh is expected to deliver a speech.
Investors are waiting for clearer signals about monetary policy orientation in the context that the market still assesses the possibility of the Fed maintaining or changing interest rates in the near future.
Mr. Han Tan - chief market analyst at Bybit - said that investors expecting gold prices to continue to rise may have to wait for the latest signals from the Fed at Jackson Hole before expecting the precious metal to return to the 5,000 USD/ounce mark.
This assessment shows that the 5,000 USD/ounce mark is still being monitored by the market, but gold needs more momentum from monetary policy to be able to go further after the recent strong increase.
Gold price may head towards 4,700 USD/ounce
Technically, gold surpassing the 4,600 USD/ounce mark is strengthening the upward trend in the short term. Some experts in the market believe that if gold maintains this price range, 4,700 USD/ounce will be the next noteworthy target.
According to the latest survey by Kitco News, the psychology of experts is strongly leaning towards an upward trend. Among the 11 experts participating in the survey, 8 people, equivalent to 73%, predict gold prices will increase next week. The remaining three experts expect gold to move sideways and no experts predict prices will decrease.
In the group of individual investors, 164/211 survey participants, equivalent to 78%, predicted gold would increase next week. Only 12% predicted prices would decrease.
Mr. Lukman Otunuga - an analyst at FXTM - said that if gold can maintain a solid closing session above 4,600 USD/ounce, the price is likely to move towards 4,700 USD/ounce. Conversely, if it falls below 4,500 USD/ounce, the precious metal may retreat to the 4,390 USD/ounce range.
Some experts even look further. Mr. Alex Kuptsikevich - senior analyst at FxPro - believes that gold may head towards 4,800 USD/ounce, although he does not rule out the possibility of a correction after prices increased by nearly 5% in just one week.
Although the upward outlook is dominant, gold is also entering the new week after a very strong increase. This makes profit-taking pressure possible if the market does not receive sufficient positive signals from the Fed.
In addition, rising oil prices may complicate inflation prospects. If energy prices continue to remain high, interest rate expectations may change in a direction unfavorable for gold.
Therefore, 4,500 USD/ounce will be an important support zone in the short term. If gold holds firmly above this zone, the upward trend will still be maintained and 4,700 USD/ounce may be the next target. Further, the 4,800 USD/ounce and 5,000 USD/ounce levels will depend heavily on the diễn biến of the USD, real yield and Fed policy.
