analysts' views about gold

Analysts’ views about Gold

admin 11 September 2021

The gold price has remained range-bound for a while, and it does not seem to break out of it soon. Since the middle of July, the gold price has tested the resistance level of $1830 several times, but going further than that level seems to be pretty difficult. The gold latest failure to cross the $1800 has disappointed many investors and analysts.

Each ounce faced a $7.9 decline on Friday trades in the U.S. which is about 0.4%. The price was closed at $1792.1, and during the week, it fell over 2%. For the first time in the past five weeks, gold prices experience a red week on the charts.

Many market analysts believe that the gold price is trapped in a range between $1760 and $1840. They think there will be no significant news in the next week that may affect this price. Also, Kitco news asked 15 analysts from wall street about the gold piece, and 60% of them had neutral ideas about the price, and only 20% of them believed that the price may increase in the next week.

Many investors are still optimistic about gold, but obviously, they are declining every day. This week, the number of investors who participated in the Kitco news survey has decreased to the lowest amount since May 2019. 494 investors participated in this online survey, and 274 of them (55%) voted for an increase in the gold price, 127 investors (26%) voted for a decrease in the gold price, and 93 of them did not have a specific opinion about the future of the gold price.

Analysts’ views

Ole Hansen, the strategic manager of Saxo Bank, stated that investors will do their best to increase the gold price. He thinks the U.S. dollar is still strong. Although the real yields of bonds are in the negative territory, the U.S. dollar is the most significant barrier in front of gold price.

Hansen does not expect the gold price to increase soon, but he believes the current price below $1800 will not last for a long time. He stated that the physical demand for gold is high, and the investors will come back to the market when the price goes higher than $1830.

Marc Chandler, the chief market strategist in Bannockburn Global Forex, is not optimistic about the gold price because he believes the U.S. dollar value has more potential to go higher. The increasing inflation will make the interest rates go higher, and they support the U.S. dollar.

However, many analysts cannot stop being optimistic about the gold price. Adam Button, the chief currency analyst in Forex Live, expressed that the gold price perspective is excellent since inflation will increase. Also, Nicholas Frappell, the global general manager of ABC Bullion, pointed to some of the technical factors supporting the gold price, and he is very optimistic about it.

For now, nothing is clear in the gold market. All we can do is wait and see what will happen in the next week.

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