Gold futures ended Friday lower, moving further away from the two-month highs they saw earlier this week. However, prices rose for the second week in a row. Analysts’ market assessments and forecasts cryptocoin.com compiled for our readers.
“Gold will get good support but will also see an increase in volatility”
Jeff Wright, chief investment officer of Wolfpack Capital, said in a statement that the losses for the precious metal came after taking wholesale profits across all asset classes, interpreting it as follows:
Institutions protect gains in every direction or position where gains are made. As a result, the return from high-growth stocks to safe-haven gold has been limited this morning. In general, we may be in more volatile markets. Gold will receive good support but will also see an increase in volatility.
Gold for February delivery fell 0.6% to $1,831.80 on Friday after losing less than $1 on Thursday. Still, the precious metal is up 0.8% weekly after gaining 1.1% the previous week. In a report released Friday, Zaner analysts included the following assessment:
While the precious metals markets were overbought due to significant gains earlier this week and some corrective measures, we see the big picture risk as the reason from the current psychology. Not only have tensions between Russia and the rest of the world weakened sentiment, but US corporate earnings seem to have lost their ability to lift stocks, and rising crude oil prices have seen a sharp correction.
Fawad Razaqzada: Investors seek protection against rising inflation
ThinkMarkets market analyst Fawad Razaqzada evaluates the developments in the markets in a daily note as follows:
Despite being outside of its best levels, gold still continues to rise for the second week. This indicates that investors are looking to hedge against rising inflation and that excessive risk-taking in stocks and crypto is over.
Precious metals like gold benefited from a global selloff in equities and a demand for safe haven amid growing concerns about the market outlook set against rising inflation and a Federal Reserve expressing intent to pull back on expansionary monetary policies.
Marketwatch strategists note that this uncertain backdrop benefits gold in the short term, but higher rates and the prospect of an eventual rise in Treasury yields will create a big headwind for gold. The Federal Open Market Committee (FOMC) will meet on January 25-26, and according to strategists, the Fed is expected to lay the groundwork for a series of rate hikes.
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