World gold prices received many optimistic forecasts from international analysts after a volatile trading week. Many experts believe that the precious metal still has room to increase in the context that the Fed is not in a hurry to change monetary policy, geopolitical tensions have not completely cooled down and buying power from central banks is still maintained.
Mr. Marc Chandler - Managing Director of Bannockburn Global Forex - said that gold prices have shown a fairly good recovery ability after a strong correction in April.
According to him, gold held the support zone around 4,500 USD/ounce at the beginning of last week when it rebounded sharply in the middle of the week thanks to falling oil prices, cooling bond yields and weakening the USD.
Gold prices have recovered about 61.8% of the decline since the nearly 4,890 USD/ounce peak on April 17" - he said.
This expert also emphasized that the reserve data of the People's Bank of China (PBOC) shows that this agency has bought gold strongly in the recent adjustment. According to Mr. Chandler, the near next target for gold prices may be 4,850 USD/ounce.
Meanwhile, Mr. Sean Lusk - co-director of trade hedging at Walsh Trading - said that the gold market is still being supported by potential economic risks and inflation.
He assessed that the US jobs report just released was more positive than expected, making it difficult for the Fed to cut interest rates soon in the short term. However, he said that inflationary pressure related to energy prices and Middle East tensions are still factors that investors need to pay special attention to.
Until further clarification in the Middle East, the risks of supply chains and inflation remain to be noted. If inflation rises sharply again, the market may have to consider a policy tightening scenario instead of easing," he said.
According to Mr. Lusk, gold prices are still attractive in the context that the Fed is likely not to change monetary policy in the near future.
They may mention the possibility of raising interest rates, but if there are no more strong enough inflation data, the Fed will not act. Therefore, gold and silver are still options worth considering in this price range," he said.
Walsh Trading experts predict that gold may experience another strong increase in the middle or late summer before adjusting seasonally at the end of the year.
I believe that gold prices will return above the 5,000 USD/ounce mark and may test the 5,200-5,400 USD/ounce zone before the US Labor Day holiday," he said.
Sharing the same positive view, Mr. Alex Kuptsikevich - senior market analyst at FxPro - said that gold prices are sending many positive technical signals.
Gold prices have increased steadily thanks to information that tensions between the US and Iran have cooled down. From the bottom to the top, this increase has completely compensated for the decline of the previous two weeks," he said.
According to Mr. Kuptsikevich, this is a signal that the upward trend of gold is still quite solid, especially in the context that the stock market also recorded its sixth consecutive week of increase.
He said that gold is trying to break down the downward trend with an important resistance zone around the peaks set in January, March and April.
Technically, gold needs to remain stable above the 4,860 USD/ounce threshold - the area of old peaks and also the 50-day moving average line. However, current signals are further strengthening market positive expectations" - he analyzed.
According to this expert, next week, gold prices may completely return to testing or even exceed the 4,900 USD/ounce mark.
