“It Could Be the Next Wave” 5 Analysts Gave Their Gold Expectations!

Gold prices started Friday with an increase. Bullion was headed for the weekly gain as the decline in the dollar and data on US employment growth, which is expected to slow sharply in January, also supported bullion. Spot gold futures were trading at $1,812.40, up 0.42% at the time of writing, while US gold futures were up 0.5% at $1,813.1 at the time of writing, according to TradingView data. Analysts’ market comments and gold price expectations cryptocoin.com compiled for our readers.

“Fed’s tightening cycle invalidates gold’s inflation hedge character”

Gold is poised to gain over 1% this week as the dollar suffers its worst weekly decline in nearly two years, making bullion cheaper for offshore buyers. Meanwhile, the US Department of Labor will release its closely watched employment report today. Margaret Yang, strategist at DailyFX, comments:

If the figure is a big loss, it indicates that the labor market is not as robust as the Fed had expected and could lead to an even softer US dollar, which could be positive for gold. The Fed’s tightening cycle is voiding the inflation hedge character of gold, which is why we’ve been seeing it trading in a tight range for the past few months.

Ole Hansen: There is very limited reason to sell gold

Gold is considered a hedge against inflation, but interest rate increases put pressure on the non-yielding asset. Gold prices are trading around $1,800 since the Fed dropped to a month-and-a-half low last week after signaling a rate hike in March to combat inflationary risks. Saxo Bank analyst Ole Hansen says:

There is an area of ​​resistance that needs to be cleared between $1,810-$1,825 and really only achievable if we see additional dollar weakness. Inflationary pressures are not going away anytime soon. There is very limited reason to sell gold, especially considering how well it has managed to withstand the recent rise in interest rates.

Gold could see gains from weak US jobs report, according to Craig Erlam

The dollar index fell 0.7% against its rivals to a two-week low, making gold cheaper for other currency holders. However, benchmark 10-year bond yields rose to 1,838, the highest in nearly a week, after a hawkish rate hike by the Bank of England boosted investors’ expectations for similar moves by the US central bank.

With these developments, Fed officials are signaling that they will start raising interest rates next month to combat high inflation. Craig Erlam, senior market analyst at OANDA, comments:

Gold is taking a hit once again as central banks are slowly approaching the idea that tightening will be warranted to contain inflation. It’s clear that the central bank was the last to admit it underestimated the inflation problem, and markets are now pricing in multiple hikes.

Extinity analyst Han Tan says gold could see a rise from a weak US jobs report, forcing markets to rethink how aggressive the Fed needs to be to rein in inflation.

“Gold continues to hover around $1,800”

Open interest fell for another session on Thursday, this time with around 2.3k contracts, given the improved numbers from CME Group for gold futures markets. Instead, volume reversed the recent weakness and increased by nearly 50,000 contracts.

According to market analyst Pablo Piovano, the small drop in gold prices on Thursday was in line with the lower open interest rate and ruled out the possibility of a deeper pullback, at least in the very near term. However, he emphasizes that the precious metal is now able to extend the consolidation around $1,800 and a decent support has emerged so far in the $1,780 region.

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