Gold prices continue their strong upward trend. However, according to some analysts, the recent momentum seems to have reached its peak. Therefore, investors need to be ready for prices to consolidate next week.
Gold prices surpassed $2,400, but…
Gold was volatile again on Friday as precious metals failed to hold on to significant gains from earlier in the day. At one point, gold prices rose more than 4% on the day, reaching $2,448.80. However, the yellow metal ended the week close to where it started. cryptokoin.comAs you follow from , gold failed to stay above $2,400. However, analysts note that gold remains relatively strong.
The new record came after March inflation was higher than expected. Because markets started to price a possible interest rate cut in June. Markets see the odds of a rate cut in June at just 27%, down from 50% last week and 68% a month ago, according to the CME Fed Tracking Tool. But analysts say the Fed is unlikely to raise rates again, even as it delays the start of its easing cycle. They note that this means real interest rates will still fall. They also note that this is a positive environment for gold.
Naeem Aslam: Gold’s momentum is still strong, however!
Meanwhile, gold prices remain well supported. However, some analysts say the rally is overextended. Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, comments:
I think the momentum is still strong, but at the same time it’s not right to be greedy. Given the stellar rally we’ve seen in the gold price, we think it’s wise to book some profit.
Philip Newman: Good idea to take some profits off the table!
Philip Newman, Director and Co-Founder of Metals Focus, has a similar sentiment. Newman says it’s a good idea for investors to take some of their profits off the table. Newman states that the gold market needs some consolidation after this unprecedented rise to record levels. In this context, Newman said, “We do not expect to see a significant pullback. “However, we think a short-term correction at these levels is reasonable.”
Ole Hansen: This will justify gold’s performance!
Ole Hansen, Head of Commodity Strategy at Saxo Bank, says that while price momentum is extreme, he is looking beyond the recent volatility. He also notes that he focuses on broader trends driving prices. The analyst notes that gold is well supported in part due to rising inflation fears and growing uncertainty about the health of the global economy. Based on this, the analyst makes the following assessment:
Right now the market is looking for something to break before something breaks. This leaves the market subject to a correction. Will I take the chips off the table? I don’t think so because I’m in this for the long run. I still wonder what will happen if economic data starts to weaken and inflation continues to rise. This will justify gold’s performance.
Christopher Vecchio: I will not follow the gold market at current levels!
Christopher Vecchio, head of futures strategies and forex at Tastylive.com, says he loves gold. However, he states that he will not follow the market at current levels. The strategist adds that he wants to buy on dips. In this context, Vecchio makes the following statement:
The Federal Reserve is telling us that even though we see solid economic growth and stubborn inflation, their next move will be a cut. This will increase real returns, which will create a positive environment for gold.
Economic data to watch next week
Market sentiment is expected to drive price movements in precious metal markets. However, it is possible that some economic data contributed to the recent volatility. Some of the key data to watch next week will be:
- Monday: US retail sales. New York Federal Reserve Empire State Survey.
- Tuesday: US building permits and housing starts. Fed Chairman Jerome Powell and BOC President Tiff Macklem will speak.
- Thursday: Weekly unemployment claims. Philadelphia Federal Reserve Manufacturing Survey. US existing home sales.
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