Gold prices soared over the weekend after a notable statement by Chairman of the US Federal Reserve (FED) - Jerome Powell. Mr. Powell emphasized that the timing and pace of interest rate cuts will depend on upcoming economic data, the outlook and the balance of risks.
Inflation has dropped significantly and the labor market has cooled. Mr. Powell also believes that the economy will have a "soft landing".
After Mr. Powell's statement, a number of other FED officials also made notable comments. Philadelphia Fed President Patrick Harker said the Fed needs to lower interest rates cautiously, while Chicago Fed President Austan Goolsbee noted that current monetary policy is at its most restrictive and that the Fed's current focus is achieve maximum employment goals.
Kevin Grady - President of Phoenix Futures and Options said the gold market is focusing entirely on the FED's expected interest rate cut.
Grady predicts gold prices will be around $2,500 an ounce before the September meeting and thinks that level could act as support when the first rate cuts take place.
Adam Button - Director of Currency Strategy at Forexlive.com is one of the experts who commented positively on gold prices this week: "There is nothing against the upward momentum" - this expert said.
Michael Moor - Founder of Moor Analytics predicts precious metals will likely have a period of consolidation this week. In the same vein, Kitco senior analyst Jim Wyckoff sees both the technical picture and fundamentals favoring gold prices this week.
Darin Newsom - senior market analyst at Barchart.com - believes that gold prices are likely to decrease in the coming days. “I will keep this direction for another week as the short-term trend for December gold has turned down.”
Sharing the same opinion, James Stanley - senior market strategist at Forex.com - believes that gold prices will tend to decrease this week. "I think we will see some profit-taking and a pullback to test below $2,500 an ounce. However I don't expect the bearish streak to last this time."
This week, market participants will focus on inflation data, with the US July PCE price index report due Friday. Markets will also get US durable goods orders for July on Monday and August consumer confidence on Tuesday, with weekly jobless claims and preliminary second-quarter GDP coming in. US announced on Thursday morning.
Traders will also pay attention to comments from the Fed's Christopher Waller early Wednesday morning and Raphael Bostic on Thursday afternoon.
12 analysts participated in Kitco News' gold survey, with the majority predicting higher gold prices. 7 experts expect gold prices to increase this week. Meanwhile, two analysts forecast that gold prices will decrease. The remaining 3 experts predict that the price of this precious metal will decrease horizontally.
There were 225 votes cast in Kitco's online poll. 146 traders expect gold prices to rise this week. Another 41 expect the yellow metal to trade lower, while 38 respondents see prices consolidating this week.
