The gold market jumped from a two-year low in the middle of the week. It rose above $1,650 an ounce. However, persistent bearish sentiment could limit gains next week, according to a survey. Here are the expectations of Wall Street analysts and personal investors for the expensive metal…
Expectations about the Fed’s rate hike have changed
For the third week in a row, Wall Street analysts are seeing a strong drop in gold prices in the near-term. At the same time, the downtrend has a slight advantage amid individual investors. The gold market was trying to close the week with heavy losses. Koindeks.com As we have also reported, the changing interest rate expectations on Friday provided a new upward momentum in the expensive metal. According to the Wall Street Journal, some members of the Fed are considering slowing the pace of rate hikes after November as volatility and uncertainty dominate financial markets.
According to the CME FedWatch Tool, markets are still predicting interest rates to rise above 5 percent by early 2023. Phillip Streible, chief market strategist at Blue Line Futures, said that although the Fed slowed rate hikes until the end of the year, it meant rising inflation remained unchanged. Rising interest rates will continue to support the US dollar near 20-year highs. Therefore, he added that he is neutral on gold in the short term.
Gold survey dominates decline
20 market professionals took part in Kitco’s Wall Street survey this week. Eleven analysts, or 55 percent of contributors, said there would be a drop in gold next week. Four analysts, that is, 20 percent of the participants, stated that they are on the rise in the price metal issue. Finally, five analysts said they are neutral on the precious metal in the near term.
There was also a decline in the online survey, in which individual investors participated. 473 respondents participated in the online surveys. A total of 180 people, or 38 percent of the participants, suggested that gold would rise. 192 people, or 41 percent, predicted that gold would fall. The remaining 101 people, or 21 percent, made the call for a sideways market. The gold market ended the week in a slightly positive region. December gold futures traded at $1,656.40, an increase of 0.5 percent compared to the latest Friday.
The price change in gold will come together with the dollar
Forexlive.com chief currency strategist Adam Button argues that gold looks attractive in the long run. However, he said that it is in a bearish trend next week due to the actions of the FED supporting the US dollar. According to the analyst, buyers are “waiting in the middle of the bushes, only ready to buy gold”. According to the analyst, your best option is to wait for a better moment to buy gold. Saxo Bank’s commodities strategy Ole Hansen said he is neutral on gold as interest rates will continue to rise. Hansen used the following words:
The highest rate expectations are now not met. A weaker dollar will be needed to replace the sentiment in gold. Until that happens, investors are playing gold in either a bearish or neutral stance. I prefer neutral.
There are also those on the rise for gold
However, while rising bond yields continue to wreak havoc on the global economy, some analysts are still bullish on gold. Adrian Day Asset Management Leader Adrian Day said that he is optimistic about gold as global central bank monetary policies have led to a significant recession. Day used the following terms:
Contrary to the UK Treasury’s argument that the system is working properly, the situation is still fragile, as evidenced by the Bank of England’s market intervention. We will see more events like this. In such an environment, gold should flourish.