Many factors have opposite effects
Marc Chandler - CEO at Bannockburn Global Forex - said that gold prices are under pressure from both the upside and downside in the short term.
“Gold fell nearly 3.4% on Monday last week, its biggest drop in five months, after peaking from a five-day rally of nearly 6%. Despite falling US bond yields and the US dollar, gold traders remained cautious,” he said.
Chandler noted that gold has yet to recover half of its recent losses (around $2,663.40/ounce). “A positive US jobs report due later next week (forecasting around 200,000 new jobs) could dampen expectations of a Fed rate cut in December and support the USD,” he said.
Short-term and technical trends
Darin Newsom, senior market analyst at Barchart.com, remains bullish: “February gold futures remain in a short-term uptrend despite the sharp sell-off earlier in the week.” However, he warned that low trading volumes due to the holiday could lead to volatility.
James Stanley, senior market strategist at Forex.com, also agreed with the bullish view: “The buying reaction at the 2,617-2,621 support zone has been remarkable. This suggests that investors see this as a buying opportunity.”
Meanwhile, Colin Cieszynski, chief strategist at SIA Wealth Management, said the market is in a consolidation phase after a major rally from February to late October. He predicted gold would fluctuate in a range of $2,532 - $2,800 per ounce.
Many experts believe that global economic and political factors will continue to support gold in the long term. Adam Button, chief strategist at Forexlive.com, emphasized the role of a weak US dollar policy in the context of President-elect Donald Trump's economic goals.
Button predicts gold could be supported by a seasonal uptrend in December and January. “History shows this is the strongest period of the year for gold,” he said.
Signals from economic data and outlook
Next week, US non-farm payrolls data will attract a lot of attention. The JOLTS employment report on Tuesday, ADP data on Wednesday, and the non-farm payrolls report on Friday will be important indicators.
In addition, Fed Chairman Jerome Powell's speech at the New York Times DealBook Summit on Wednesday will also be closely watched before entering the Fed's "silent" period.
Gold remains a buying opportunity at current levels, with an initial price target of $2,700 an ounce by December 11, according to experts at CPM Group.
Jim Wyckoff, senior analyst at Kitco, predicts gold will hold Friday's gains and could move higher next week, supported by safe-haven demand.
