Global spot gold prices experienced a week of significant fluctuations. Earlier this week, prices surpassed USD 4,200 an ounce. However, the precious metal then faced a sell-off as the US dollar strengthened and bond yields rose. US inflation data for September further depreciated gold, pushing it down to USD 4,073. Towards the end of the week, gold recovered after Fed Chairman Kevin Warsh did not signal an interest rate hike in October.

A Kitco News survey conducted this weekend among bank directors, analysts, and investors indicates that gold's performance next week is difficult to predict. The survey revealed mixed sentiments: 33% of participants expect prices to rise, 17% forecast a decrease, while 50% anticipate the precious metal will trade sideways or choose to observe from the sidelines.

Despite the current downward trend, some analysts maintain a positive outlook. James Stanley, a senior market strategist at Forex.com, acknowledged that prices might see further correction as charts indicate a downward trend. However, he remains optimistic, stating, "The USD 4,000 mark is the most significant support level". Alex Kuptsikevich, a senior analyst at FxPro, believes the market could depend on the US political situation, with midterm elections approaching in the coming weeks. He noted, "Investors often seek to reduce political risk during this period. This benefits gold in the coming weeks". Kuptsikevich suggests gold could soon be pushed into the USD 4,400-4,500 range.

Conversely, a number of experts express caution regarding gold's immediate future. Adam Button, Head of Currency Strategy at investingLive, explained his concerns about monetary policy: "I find it hard to imagine the Fed will only raise interest rates by a total of 70 basis points as the market expects. This week's inflation data is a major issue but is being downplayed due to concerns about AI-related borrowing activity", he said. Fawad Razaqzada, an analyst at StoneX Bullion, also offered a cautious view. Despite gold's mid-week recovery, he doubts the precious metal has bottomed out, assessing, "There are no clear signs that the correction has ended. For me, at least in the short term, gold prices are still slightly declining. The precious metal has held the support area around USD 4,100, but the resistance level above remains very strong".

Global gold price movements over the past month. Chart: Goldprice

Other experts remain neutral, seeing no strong catalysts for the precious metal. Colin Cieszynski, a market strategist at SIA Wealth Management, stated he is "neutral on gold prices next week". According to him, gold appears to be fluctuating around USD 4,200. With less economic data scheduled for next week, attention will likely shift to corporate financial reports. Adrian Day, President of Adrian Day Asset Management, forecasts that gold prices will be difficult to change and will continue to fluctuate within a narrow range. He believes the most probable catalyst is the end of conflict, leading to a weaker US dollar and lower oil prices.

Looking ahead, the US will release limited major economic data next week. Investors will receive reports such as new housing starts, building permits, and pending home sales for September. Unemployment claims, manufacturing and services indices, and consumer confidence will also be released.

Ha Thu (according to Reuters, Kitco)