Ole Hansen - Head of Commodity Strategy at Saxo Bank, said he still sees the upward potential of gold.
The war will increase inflation but also weaken economic growth. Although I think the possibility of interest rate cuts in 2026 should not be ruled out, especially when the Chairman of the US Federal Reserve (Fed) tends to listen to Trump's views, it is clear that the Fed is in a difficult position if economic data weakens while inflation increases," he said.
According to Hansen, cutting interest rates while inflation rises could destabilize the bond market as long-term yields rise, thereby actually tightening financial conditions due to the more steep yield curve.
He also said that although gold buying demand from central banks may slow down, concerns about public debt, geopolitical tensions and currency value will continue to support gold demand.
Robert Minter - ETF Strategy Director at abrdn, also maintains an optimistic view of gold when looking beyond short-term selling pressure. He believes that gold is still in a long-term uptrend as governments continue to increase deficit spending and central banks expand their balance sheets.
Currently, no solution has been implemented that can reduce public debt in most countries that use large legal tender money," he said.
While most of the market's attention next week will be focused on the Fed, the economic schedule will also be busy with meetings of many other central banks.
Increase", Mr. Adrian Day - Chairman of Adrian Day Asset Management, commented - "Currency factors are returning to play the role of the main driver of gold prices, and will become even clearer after the conflict with Iran ends.
In the near future, there will be fluctuations based on new developments and announcements, but after initial reactions, geopolitical events usually only play a secondary role compared to monetary factors for gold.
In the past two weeks, since the airstrikes began, gold prices have traded almost in the opposite direction to the USD, which reflects most of the developments of the war," Mr. Day added.
Notable economic data for next week
The week will begin with the meeting of the Reserve Bank of Australia (RBA), where the market expects a slight interest rate hike due to increased inflationary pressure.
The Bank of Canada (BoC) will announce its monetary policy decision on Wednesday morning, before the Fed makes a decision. The Bank of Japan (BoJ) will also meet afterwards.
By Thursday, the Swiss National Bank (SNB), the Bank of England (BoE) and the European Central Bank (ECB) will all announce monetary policy decisions. The market currently does not expect significant changes from these banks.
In addition, the market will also receive more data on the US housing market and regional manufacturing surveys.
