Gold prices continued their strong rise this week amid ongoing conflicts in the Middle East. Spot gold peaked just below the $2,000 level heading into the weekend. It looks set to reach an all-time high in the not too distant future.
Analysts predict decline in gold price survey
cryptokoin.comAs you follow from , gold has been showing strength for the last two weeks. The latest Kitco Weekly Gold Survey shows retail investors remain very bullish on the yellow metal for the week ending October 27. However, market analysts are expecting a pullback after this dramatic two-week rise. 13 Wall Street analysts voted in this week’s Gold Survey. Four experts (31%) expect an increase in gold prices next week. On the other hand, six analysts (46%) predict a decline in prices. Additionally, three experts (23%) remained neutral on gold for the coming week.
Meanwhile, individual participants cast 105 votes in the survey. 72 of them (69%) think gold will rise next week. Another 20 (19%) expect a decline. Additionally, 13 respondents (12%) remained neutral on the precious metal’s near-term prospects.
Ole Hansen: It will be lower for consolidation
Ole Hansen, head of commodity strategy at Saxo Bank, says gold will come down from its highest levels next week. “It will be lower,” Hansen said. “It provides such an excuse not because the bullish drivers have disappeared, but because the market needs to consolidate with the resistance at $1,985.” says.
Daniel Pavilonis: Geopolitics will be decisive for gold prices
RJO Futures Senior Commodity Broker Daniel Pavilonis states that gold prices will continue to be affected by geopolitics. Therefore, he notes that it can break in both directions. In this context, Pavilonis makes the following statement:
I expect the shiny metal to rise as things heat up. However, as things soften a bit, maybe it will drop. I feel like we’re still range bound. We are not out of this range yet. However, we are definitely getting very close to being out of range.
Pavilonis expects gold prices to pull back unless something dramatic happens over the weekend and early week. It also predicts that it will test recent support levels. “We hit a hard bottom in 1822,” he said. “I think if things start to turn around here, then we’ll start to get back there,” the analyst said. “I would say the first support point will be somewhere around 1,940 and then it will break somewhere around 1,907, 1,904.” says. Meanwhile, he states that central banks will also monitor the gold market. He also adds that they are not happy when it rises sharply like this.
Darin Newsom: More earning opportunities next week
Barchart.com Senior Market Analyst Darin Newsom predicts more gains for gold prices next week. According to the analyst, one ounce of gold appears sharply overbought on its short-term daily chart. Therefore, Newton’s First Law of Motion as applied to markets remains valid. The analyst explains these thoughts as follows:
A trending market will remain in that trend until prompted by an external force. Additionally, this external power is often investment money. For now, the investment side of the market appears to continue to view gold as a safe haven ahead of an uncertain weekend in the Middle East.
Adam Button: Gold is doing what is expected of it!
Forexlive.com’s chief currency strategist Adam Button says that gold and oil are doing exactly what is expected of them under these conditions. He also notes that both will remain sensitive to new developments in the conflict. In this regard, the strategist shares the following assessment:
With any uncertainty in the Middle East, there is always a rise in gold, oil and the US dollar. So far, Middle East trade has proceeded according to script, at least in broad terms. Oil has been quoted, gold has been offered, and the dollar has been offered, but you would have thought that maybe the dollar might have had a slightly stronger bid by this point… I think the next gold trade would probably be to sell the truth once the land invasion starts, assuming it doesn’t spread all the way to Iran. I am a peaceful man. I think there will be no bombs falling on Tehran next weekend. I think the bottom for gold is probably 1,900, 1,925.
Marc Chandler: Gold price rally is hard to fade!
Bannockburn Global Forex General Manager Marc Chandler also expects gold to pull back a bit. Chandler states that gold gained value around $46.50 this week, after being around $100 last week. According to the analyst, geopolitics is the main driver and offsets the adverse dampening effect of higher rates. Meanwhile, Chandler says the dollar is sending mixed signals. Chandler says it’s hard to see the gold rally fading without a solution to the situation in the Middle East. However, he notes that the move still seems excessive to him. In this context, the analyst points to the following levels:
Gold moved from testing the lower Bollinger Band to flirting with the upper Bollinger Band ($1,982). I agree that $2,000 is psychologically important and it may be tempting for short-term momentum investors to look for a pullback to remove some of these levels and reestablish. An initial support might be near $1,950 and then $1,920.
3 bullish predictions for gold prices
Adrian Day, President of Adrian Day Asset Management, says gold prices will stabilize at higher levels. “Gold prices will likely remain elevated as long as tensions in the Middle East continue,” says Day.
Mark Leibovit, publisher of VR Metals/Resource Letter, is bullish on the yellow metal. “It is possible for gold to rise above the $2,000 level next week,” the analyst says.
Kitco Senior Analyst Jim Wyckoff also expects gold prices to continue their upward trend. “It will move higher as the charts turn bullish and safe-haven demand increases,” says the analyst.
James Stanley expects decline because…
James Stanley, senior market strategist at Forex.com, expects gold prices to fall next week. The analyst explains the reason for this prediction as follows:
The upward movement has priced in so quickly and we are so close to the 2,000 level that I think some profit will be made. We could see $2k trading next week and even see a net gain from this week’s close. But on a net basis, I like the asymmetry around the potential for a pullback for gold next week. But this does not mean that it has reached the top.
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