This week, 18 Wall Street analysts participated in Kitco's gold survey, with the bullish camp remaining in the majority. Twelve experts, or 67%, anticipate the precious metal will surpass 5,300 USD next week, while only two (11%) predict a decline. The remaining four (22%) believe the risks are balanced in the short term.
Meanwhile, 266 individual Main Street investors voted in Kitco's online poll, showing a strong improvement in sentiment. 202 investors (76%) expect gold prices to continue rising next week, 34 (13%) forecast a decrease, and the rest (11%) believe prices will remain flat.
At the close of trading last weekend, the spot price of world gold increased by 94 USD to 5,278 USD an ounce. This marks the highest level since the trading session on 30/1.
The market's upward movement indicates investors are betting on a positive scenario for gold prices ahead of a US and Israel attack on Iran. Neils Christensen, a Kitco analyst, metaphorically stated that many chose to "sleep with gold" over the past weekend.
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World gold surpassed the key resistance of 5,250 USD last week, closing near 5,278 USD an ounce. Source: CNBC |
World gold surpassed the key resistance of 5,250 USD last week, closing near 5,278 USD an ounce. Source: CNBC
James Stanley, senior market strategist at Forex, maintains an optimistic view, stating there is "no reason to doubt at this point, even though current gold prices are quite challenging." He noted that buying at current levels might be difficult, but he sees no reason for a trend reversal.
Darin Newsom, senior market analyst at Barchart, commented that the world still does not know the US's next "target." "Greenland or Mexico, maybe Canada, even Mars, no one knows, so the safest thing to do is to continue buying gold," he opined.
Marc Chandler, managing director at Bannockburn Global Forex, said that gold surpassing 5,250 USD could signal a rally towards 5,500 USD an ounce. The decline in the 10-year US bond yield below 4% makes gold—a non-yielding asset—more attractive.
Beyond new developments from geopolitical tensions, the fundamental factors supporting gold over the past four years remain intact, suggesting that the 5,200 USD mark will serve as a new launchpad for further gains.
Adding to this argument, Rich Checkan, President and COO of Asset Strategies International, clarified that the market's foundation has been built over the past four years, as central banks purchased gold at historically unprecedented levels. Signs of economic slowdown and political turmoil in the US, a weakening USD, and the nation's ballooning debt all indicate that the gold price rally will continue.
"Foreign governments hold and trust gold more than the USD," he added.
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Gold bars and coins displayed in London, England. Photo: Reuters |
Gold bars and coins displayed in London, England. Photo: Reuters
However, some dissenting opinions exist. Alex Kuptsikevich, senior analyst at FxPro, believes gold prices will decline. Gold increased by about 2% last week, marking its third consecutive weekly gain. Therefore, in the long term, preparation for lower prices and increased selling pressure is needed.
Analysts at CPM Group issued a recommendation to sell gold on 27/2, with an initial target of 5,100 USD during the period of 23/2-6/3 and a stop-loss level of 5,275 USD. They still expect higher gold prices over the next month, but a decline next week is possible. This analytical group advises extremely short-term traders to stay out or open short selling positions.
Sean Lusk, co-director of commercial hedging at Walsh Trading, agrees that the recent rally in the precious metal is not solely due to the conflict in Iran. He acknowledges that a deal or some de-escalation with the Tehran government could trigger a sell-off. However, he noted that previous declines in both gold and silver have seen strong buying interest. He believes this sentiment has not concluded, which would prevent any potential decline from being too deep.
Tieu Gu (according to Kitco)
