Global gold prices began the past week at USD 4,210 per ounce, peaked at USD 4,381, and closed just above USD 4,200.
The market fluctuated as safe-haven demand, driven by Middle East instability, gave way to strong selling pressure after the U.S. Federal Reserve (Fed) announced it would keep interest rates unchanged, yet signaled a potential rate hike this year.
A Kitco News survey indicated that most Wall Street experts are pessimistic following the Fed's hawkish message. Specifically, seven experts (70%) forecast a continued decline in the precious metal's price, while only one believed it would increase. The remaining two experts maintained a neutral stance.
However, individual investors remained optimistic, with 54% predicting a rise and 35% expecting a decrease. Additionally, 11% anticipated prices would stabilize next week.
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Global gold price forecast for the week of 22-26/6. Source: Kitco |
Global gold price forecast for the week of 22-26/6. Source: Kitco
Darin Newsom, senior market analyst at Barchart, believes gold will continue to fall. He noted that central banks are still buying gold, but investors are selling. The Fed's signal of a potential rate hike this year supports the US dollar, putting pressure on the precious metal.
Alex Kuptsikevich, senior market analyst at FxPro, shares this view. "I would not be surprised to see gold prices retest the USD 4,000 mark next week," he said. Michael Moor, founder of Moor Analytics, also leans towards a short-term decline scenario, although he anticipates some technical rebounds in the market.
Conversely, Rich Checkan, President and CEO of Asset Strategies International, argued that the recent correction was excessive. He believes much of the current development depends on the US-Iran peace agreement negotiations in Switzerland and the details finalized in the next 60 days.
"If we continue towards a more lasting peace, gold will benefit, regardless of what Chairman Warsh does at the Fed," he stated.
Meanwhile, Kevin Grady, President of Phoenix Futures and Options, observed that while market movements appear dramatic, actual liquidity is not high. "Trading volume is weak, and open interest is extremely low. The market currently has little interest in gold," he commented.
Next week, investors should monitor key US economic data, which could influence the Fed's interest rate expectations and, consequently, gold prices. Most notably are the personal consumption expenditure (PCE) index for May and the final revision of Q1 GDP. Additionally, weekly unemployment claims data and the University of Michigan consumer confidence index for June will be released.
Phi An (according to Kitco)
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