While gold prices are likely to stay above breakout levels for many Wall Street analysts, sentiment has dropped from last week as the precious metal is likely to consolidate in the near term. Gold prices did not see much increase after the previous week’s exit rally. However, many analysts said they were discouraged as prices remained well above critical support levels and were trading close to five-month highs. For details cryptocoin.comDon’t leave.
Are gold prices consolidated?
“I was looking for a pullback to $1,830 and we haven’t seen it yet,” said Bill Baruch, president of Blue Line Futures. “As long as we stay above this level, the trend remains very upside down,” he said. Ole Hansen, head of commodity strategy at Saxo Bank, also noted the relatively strong performance of gold this week. However, he added that the market must see renewed demand for gold-backed exchange-traded products to ignite a more substantial rally.
This week, 17 Wall Street analysts took part in Kitco News’ gold survey. Among respondents, eight analysts, or 47%, expect gold prices to rise next week. At the same time, four analysts, or 24%, were bearish against gold in the short term, and five analysts, or 29%, were neutral on prices. Expectations fell sharply among Wall Street analysts compared to last week when 83% was bullish. Meanwhile, a total of 1,057 votes were cast in online Main Street polls. Of these, 747, or 71%, expect gold to rise next week. Another 162, or 15%, voters said gold would drop, while 148 voters, or 14%, remained neutral. While participation in online surveys continues to rise, sentiment among retail investors is at its highest level since May. Gold prices are closing the week with losses. December gold futures were last traded at $1,849.50, down 1% from Friday.
The direction of inflation is effective
As global inflation pressures continue to increase, many analysts remain optimistic about gold. Inflation in the UK soared to its highest level in a decade this week; At the same time, Canadian consumer price pressures rose to an 18-year high. Colin Cieszynski, chief market strategist at SIA Wealth Management, said he remains optimistic about gold as inflation is not falling and that “gold is consolidating nicely above its recent breaking point”. While some analysts still see long-term potential in the gold, they also said a consolidation would be healthy for the current uptrend. Adrian Day Head of Asset Management Adrian Day says:
The sentiment is turning, and with more spending from Washington, rising inflation from North America and Europe, Christine Lagarde from the European Central Bank being blind to what’s going on… the fire is poised for an explosive move by the end of the year.
Nicholas Frappell, global managing director of ABC Bullion, said he expects gold prices to be weaker next week as the precious metal fails to climb above $1,873 an ounce. According to him, if the price does not rise and closes below $1,873 this week, a downside move could be attempted for short-term players, especially as the dollar finds some support. Marc Chandler, managing director of Bannockburn Global Forex, said a stronger US dollar could create a headwind for gold in the short term. Analyst:
Momentum indicators have stretched but look ready to roll over, but weekly indicators suggest more gains are likely. As long as it’s $1850, the market could take another run between $1900-1915. A break of $1850 marks $1,832 and perhaps $1,820.
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