As wage inflation rises, interest in gold increases. Increasing inflation pressures and central banks in no hurry to raise interest rates are increasing the bullish sentiment in the gold price market. Detail cryptocoinon .com.
Is the direction up for gold prices?
While analysts see room for gold prices to rise, a few still point out that the market is facing significant overall resistance. According to some analysts, prices must eventually rise above $1,835 an ounce for gold to regain its shine and gain new momentum. This week, 18 Wall Street analysts took part in Kitco News’ gold survey. Among respondents, ten analysts, or 56%, expect gold prices to rise next week. At the same time, two analysts, or 11%, were bearish against gold in the short term, and six analysts, or 33%, were neutral on prices. Meanwhile, a total of 622 votes were cast in online Main Street polls. Of those, 326, or 52%, expect gold to rise next week. 108 voters, or 17%, remained neutral, while the other 188 or 30% voters said it would be lower.
The bullish sentiment comes as gold prices end the week with solid gains above $1,800 an ounce. Gold managed to close the week above $1,800 for the first time since the end of September. December gold futures were last traded at $1,810.60, up 1.5% on the day. The rise in gold also came on the day the US government reported stronger-than-expected employment numbers in October. US Department of Labor 531,000; economists had expected to see job growth of around 425,000. Ole Hansen, head of commodities strategy at Saxo Bank, said: “We were expecting the theme of inflation to start playing in the gold market, and this could be a start. “If inflation starts to rise and central banks are lagging behind, you’ll want to have a few gold coins in your pocket,” he said.
1835 critical level
However, Hansen added that while he is optimistic about gold in the near term, $1,835 remains the critical level to break. Phillip Streible, chief market strategist at Blue Line Futures, said he was watching $1,835 an ounce. He added that he is neutral on gold until this level is broken. “A close above $1,835 and you will see all the shorts capitulate and gold prices really start to move,” the analyst said. Not only are inflation pressures increasing, but the Federal Reserve and other central banks continue to downplay the growing threat. The U.S. central bank said this week it was reducing its monthly bond purchases, while Federal Reserve Chairman Jerome Powell said it was not the right time to raise interest rates.
Following the Fed’s monetary policy decision, the Bank of England did not change interest rates, contrary to expectations. Markets expected the BoE to raise interest rates. Adrian Day, head of Asset Management, said he was optimistic about gold. However, not all analysts are optimistic about the precious metal. Darin Newsom, head of Darin Newsom Analysis, said gold prices must rise above $1,815 an ounce to break the current sideways trend. However, he added that while the US dollar index is trading at a critical resistance point at 93.50 points, the US dollar draws attention to the rise. “If this continues and the dollar rises, gold could top early next week,” the analyst said.
Marc Chandler, managing director of Bannockburn Global Forex, said he is not convinced that gold is ready to explode. He added that next week’s Consumer Price Index data could raise interest rates with the US dollar, which will put pressure on gold prices. David Madden, a market analyst at Equiti Capital, said he is also watching the US dollar. However, he added that the dollar could form a short-term top after the Fed’s monetary policy meeting. He said much more positive economic data is needed to create new momentum for the US dollar.
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