Although many Wall Street experts are giving optimistic views on gold prices, some opinions suggest that the precious metal market still faces no small pressure in the short term as cash flow continues to prioritize stocks and US economic data has not shown clear signs of weakening.
Mr. Darin Newsom - senior market analyst at Barchart.com - is one of the few opinions predicting that gold prices may fall this week.
I predict gold prices will decrease this week" - he said - "I have predicted an increase in the past two weeks but the results are quite opposite. In fact, the global situation has not changed much, but the market may still continuously reverse direction.
According to Mr. Newsom, in terms of technical factors, the June gold contract is currently approaching the 50-day moving average, around 4,812.2 USD/ounce as of last weekend's session.
He said this is a notable resistance zone as gold prices have not been able to close above this average since March 17. The last time gold approached this threshold was on April 17, before plunging nearly 350 USD/ounce until May 4.
However, this expert believes that the long-term upward trend of gold has not been broken if the price is maintained above the bottom of 4,533.3 USD/ounce set on May 4.
Meanwhile, Mr. Kevin Grady - Chairman of Phoenix Futures and Options - assessed that the US economy is still maintaining a fairly positive state, despite many previous pessimistic forecasts.
He said that the business results of US businesses continue to be positive, and the latest jobs report shows that the economy still maintains stability.
According to Mr. Grady, energy self-sufficiency helps the US have more room to manage the economy and respond to geopolitical tensions related to Iran. He noted that WTI oil prices are currently still maintained below $100/barrel even though the conflict in the Middle East has not completely cooled down.
He also said that US sanctions against Iran's oil transportation through the Strait of Hormuz have put great pressure on Tehran, forcing it to return to more serious negotiations.
Regarding the developments of gold, Mr. Grady recommended that investors pay more attention to trading volume instead of just looking at short-term price fluctuations.
According to him, there were sessions last week when the total trading volume on the Comex exchange fell below 125,000 contracts - a signal that both large organizations and individual investors are still standing outside the market.
Until liquidity improves and a strong increase appears accompanied by a larger volume, large cash flow will not return to the precious metals market. Therefore, current price fluctuations may still be erratic and unstable," he assessed.
Experts believe that in the short term, gold price movements will continue to depend on US economic data, Fed policy and geopolitical situation in the Middle East.
