Experts predict optimistic gold prices in the new week?

Gold prices have fallen in recent weeks, but some experts believe that this decline is only temporary and that gold prices will soon recover.

As gold prices plummeted from $2,800 an ounce to just over $2,500 an ounce in just two weeks, experts and traders have been trying to figure out why and predict how far the precious metal will fall in the coming time. While gold holders are reassured that gold is still a good investment in the medium to long term, they are still worried about the continuous decline in gold prices.

“ Gold has fallen nearly 5% this week alone, marking its deepest weekly decline in nearly three years. The metal has fallen more than $250, or around 9%, from its peak, making it the longest losing streak since the beginning of the month,” noted Alex Kuptsikevich, senior market analyst at FxPro .

Gold prices fell as the dollar strengthened and interest rate cut expectations eased, but could recover on economic uncertainty and inflation. Photo Kitco News

However, market analyst Alex Kuptsikevich notes that the gold rally since October is still intact, so even if gold falls to $2,400 an ounce, it will be a correction, returning the price to its 200-day average. At the current rate of decline, gold could reach that level before the end of the year.

Technically, Kuptsikevich pointed out that there is a significant bearish signal on the weekly chart. Gold prices have fallen sharply after rising too quickly, while the relative strength index (RSI) has also fallen from above 80. Such a reversal at extreme levels often signals a change in market momentum.

To better understand the impact of this signal, Kuptsikevich looked at historical events. He noted that in 2009 and 2011, there were also two sharp bearish reversals from all-time highs.

In 2009, gold prices fell 15% from peak to trough before rallying back to an all-time high on renewed buying. This bull market lasted for nearly two years, with only brief pauses. Similarly, in 2011, gold prices fell nearly 20%. Although gold subsequently rallied 17%, the bull market momentum was broken. Over the next four years, gold lost 45% of its value.

In both cases, Kuptsikevich said, the 50-week moving average acted as medium-term support during the decline. Currently, the moving average is at $2,330 an ounce and is trending up. Kuptsikevich predicts that the moving average could reach $2,400 an ounce by the end of the year. If gold prices fall below that level, there is a chance that prices could fall further.

Naeem Aslam, chief investment officer at Zaye Capital Markets, confirmed that the precious metal has been weak recently but he sees a number of factors that could adjust the path of price action.

“ There has been significant downward pressure on gold prices in the past few days due to a rising US dollar and changing expectations of Federal Reserve monetary policy ,” said Aslam, noting that gold prices are set to post their biggest weekly loss in months.

“ Traders and investors are concerned that the price of the yellow metal could face a much more challenging time in the near term as the Federal Reserve is in no rush to change its monetary policy anytime in the near future with fresh economic data, ” said Aslam.

He pointed out that while a stronger US dollar and expectations of fewer rate cuts are weighing on gold prices, a number of factors could change the price trajectory in the coming months. “ Gold’s appeal as a safe-haven asset could be reinforced by global economic uncertainties such as trade disputes and geopolitical tensions. Investors may seek refuge in gold in the event of increased uncertainty .”

In addition, Aslam said inflation could also affect gold prices. The Fed may have to change policy if inflation continues to rise higher than expected. Therefore, gold prices could rise if inflation is higher than interest rate increases.

Ultimately, the recent outperformance of the US dollar could be reversed. “ Demand for gold could increase if the US dollar starts to depreciate due to domestic or external factors ,” Aslam said.

Comments from Federal Reserve members will also have an impact, as happened on Thursday when Governor Kugler suggested that the pace of rate cuts could slow. “ Upcoming speeches and statements from Federal Reserve officials, including Chairman Jerome Powell, will be closely watched. Any indication of a change in monetary policy could have a significant impact on gold prices,” he added .

The economic calendar next week will focus heavily on housing. U.S. housing starts and building permits for October are due on Tuesday. The Mortgage Bankers Association (MBA) will release mortgage applications on Wednesday. On Thursday, October existing home sales data and the Philadelphia Federal Reserve (Philly Fed) manufacturing index (the Philly Fed index measures manufacturing activity in the Philadelphia region) will be released. Also on Thursday, the University of Michigan will release consumer sentiment data for November.

In addition, several central bank officials are scheduled to speak next week. Investors will be watching these speeches for clues about the pace and extent of future rate cuts. Specifically, Dallas Fed President Robert Kaplan will speak on Monday, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan will speak on Thursday.

Source: https://congthuong.vn/chuyen-gia-du-bao-lac-quan-ve-gia-vang-trong-tuan-moi-359212.html