Gold prices slumped on Monday, placing prices at a nearly two-week low after higher stocks and Treasury yields. Today, the yellow metal is flat. Market comments and gold forecasts from leading analysts cryptocoin.com compiled for our readers.
Chintan Karnani expects ‘cautious optimism below’
“The gold market is struggling with negative sentiment from gold’s 3.6% year-on-year decline in 2021,” analysts at Zaner comment in a Monday news release. Analysts make the following assessment:
Unfortunately for the bull camp, US Treasury yields remain high and silver and gold could threaten long-terms as markets await this Friday’s nonfarm payroll (NFP) report. Prospects for this week’s NFP report project 400,000 job gains, almost double the shockingly negative data from November.
In a statement, Chintan Karnani, research director of Insignia Consultants, said that gold for February delivery failed to trade above its 400-day moving average of $1,826.10, causing prices to plummet. The director states that the very low death and hospitalization rate due to the Omicron variant will reduce safe-haven demand for gold.
Chintan Karnani states that February gold should be traded above its 200-day moving average of $1,806.40 on a daily closing basis, and reminds that if it doesn’t, it may result in further sales and a re-increase in short positions. For now, the analyst expects “underly cautious optimism”.
“Strength in stock index shows bearish trend for gold”
Analysts say the drop in yellow metal comes with the expectation of the start of a seasonally strong buying period in precious metals. Marios Hadjikyriacos, senior investment analyst at brokerage firm XM, highlighted in a note Monday:
The December-January period has historically been very strong for bullion, which has risen on the 8th of the last ten January.
Marios Hadjikyriacos pointed out that the markets in the UK and Canada remained closed on Monday and therefore trading volumes are expected to be ‘lower than normal’.
Metal markets were open on New Year’s Eve on Friday, but some international markets remain closed for the New Year’s holiday. A rise in debt rates makes unproductive precious metals less attractive compared to coupon-offering debt, while a stronger dollar makes dollar-priced bullion more expensive to offshore buyers. Senior analyst Jim Wyckoff comments in a daily note:
Strength in US stock indices indicates low trader and investor risk aversion in the market at the moment and a bearish trend for safe-haven metals.
While there is little risk aversion in the market right now, some market analysts believe 2022 will be a tougher year for stock markets as central banks have reined in easy money policies so far and the world is still struggling with Europe, according to Jim Wyckoff. .
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