Gold prices fell slightly on Monday as expectations persisted that the US Federal Reserve will begin tapering this year, although US NFP data released on Friday remained gold to expectations. At the time of writing, spot gold fell 0.1% to $1,754, while US gold futures fell 0.1% to $1,754.30. cryptocoin.com We have compiled for you the evaluations of analysts regarding the next movement of gold.
“Gold market has great difficulty in identifying the issues regarding the next step”
Sharing his views on gold prices, IG Market analyst Kyle Roda makes the following assessment:
Payroll data won’t stop the Fed from tapering. Labor shortages are feeding pressures on higher wages, and this could worsen inflation. This means that they will eventually have to step in.
The precious metal is seen as a hedge against inflation and currency depreciation from widespread stimulus. The Fed’s tapering could eliminate these two conditions, reducing the attractiveness of gold. Kyle Roda draws attention to the following in his evaluation:
The gold market is having great difficulty identifying the issues regarding the next step. My personal bias is negative, but right now we’re stuck in a range.
“Gold likely to stabilize at $1,500 before the end of 2022”
Despite the slowdown in employment growth last month, the Fed may begin to reduce its support for the economy next month. Data on Friday showed US nonfarm payrolls increased by 194,000 jobs in September, below economists’ forecast of 500,000. Meanwhile, the unemployment rate fell to an 18-month low of 4.8% and wage increases accelerated. Noting that gold is likely to stabilize at $1,500 before the end of 2022, OCBC Bank economist Howie Lee comments in a note:
In the face of this energy crisis and weak September nonfarm payrolls, the precious metal is still trading below $1,800. There is little faith among the golden bulls.
Gold price was limited to $1,800
Open interest increased by just 720 contracts on Friday, partially reversing the previous day’s decline, according to preliminary data from CME Group for gold futures markets. Along the same lines, volume increased by approximately 97.5 thousand contracts. Market analyst Pablo PIOVANO states that gold prices entered a very volatile session on Friday and eventually closed the session with marginal losses and within the dominant consolidation range.
The move took place amid growing open interest and volume, allowing this range-bound theme to continue in the very near term. Meanwhile, the precious metal remains capped at $1,800.
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