Gold closed the week down 3%. Wall Street, on the other hand, looks negative for gold for next week, citing the strong US dollar and pressure from the upcoming Jackson Hole Symposium.
Dollar gained strength, gold lost serious altitude
cryptocoin.comAs you can follow, the US dollar index (DXY) has reached its highest levels in 20 years. Under this pressure, gold tumbled on Friday. December Comex gold futures were last traded at $1,763.10, down 3% week on week.
Minutes from July’s FOMC meeting showed Fed officials agreed on the need to eventually slow the tightening cycle. After that, markets continue to focus on any Fed speaker. Still, they first need to see how rate hikes affect inflation.
All eyes on the Jackson Hole symposium
All eyes are on Fed Chairman Jerome Powell’s ‘Economic Outlook’ speech at the 2022 Jackson Hole Economic Policy Symposium scheduled for Friday morning. Daniel Ghali, commodity strategist at TD Securities, made the following assessment in a statement:
All eyes on the Jackson Hole symposium. Powell’s remarks next week are one of the key ways the Fed can counteract the pricing cycle next year after tightening this year. We think that market expectations are inconsistent with the Fed’s inflation targeting management. We expect interest rates to remain high and to lower the interest rate of precious metals.
What do the gold survey results show?
The results of Kitco’s weekly gold survey revealed that Wall Street is in decline for gold prices next week. 55% of 11 analysts surveyed expect prices to fall. 27% of respondents are neutral and only 18% predict prices will rise.
On the other hand, the Main Street side continued its uptrend for the week ahead. According to the survey, 46% of 709 individual respondents predicted higher prices. 35% of respondents made a lower prediction of movement and 19% remained neutral.
Key levels for yellow metal
Senior analyst Jim Wyckoff says the technical picture is bearish in the near term. In this context, the analyst draws attention to the following technical levels:
The bears’ next near-term downside price target is to push futures prices below solid technical support at $1,725.00. Initial resistance is the crossing high at $1,762.70. It then stands at $1,775.90, Thursday’s high.
According to Michael Moor, bulls are in standby mode
According to Michael Moor, founder of Moor Analytics, the fall of gold below the $1,800 level this week has put the bulls on hold. The analyst explains his views as follows:
Trade above $1,786.3-8.3 will warn of strength. A continuing gap below Monday leaves a sizable bearish trend that will warn the pressure for days/weeks.
“Gold cannot fight a higher interest rate environment”
Alliance Financial precious metals dealer Frank McGee forecasts lower prices next week. According to the analyst, selling rallies will be the preferred approach in gold trading at the moment. Opening his review, McGee says:
The Fed is raising interest rates and QT (quantitative tightening) is starting to take hold. Gold cannot fight a higher interest rate environment.
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