Many experts believe that gold prices this week may continue to move sideways or decrease, as investors are still waiting for the Fed’s next interest rate reduction decision.
According to Kitco’s latest survey, out of 13 analysts participating in the survey, only 2 believe that gold is likely to go up this week. In contrast, the forecast rate of decline and sideways accounts for 31% and 54%, respectively.
The online poll of 228 individual investors showed that 61% of participants predicted gold prices positively. Meanwhile, 19% of investors have pessimistic sentiment and 20% have neutral views.
Mr. David Morrison, Senior Market Analyst at Trade Nation, is pessimistic about gold in the short term. “The outlook for gold is quite uncertain,” he said. This expert commented that the MACD indicator on the daily chart seems to need to drop to a lower level to trigger new buying pressure. Although technology stocks led the sell-off in the US stock market, so far there are no signs that investors are looking to gold as an alternative haven asset.
Gold bars from the vault of a bank in Zurich (Switzerland). Image: Reuters
Mr. Alex Kuptsikevich, senior market analyst at FxPro, forecasts that gold will decline this week. He is watching the possibility of a break of the 50-day moving average.
According to him, last month’s price drop ended gold’s three-year bull run. However, prices have held up quite well over the past few weeks, despite a stronger USD and progress on the peace plan for Ukraine – these factors can easily cause gold to fall. Currently, buyers keep the price above the trend line (50-day moving average). “If it breaks below this level, the current trading trend may change,” FxPro experts said.
And Mr. Kevin Grady, President of Phoenix Futures and Options, said the market is waiting for the Federal Reserve (Fed) to give a direction signal. “I think most of the problem is interest rates,” he said. This expert said that investors are waiting to see what the Fed will do at the December meeting and are closely watching the minutes and previous statements.
Sharing the same opinion, Mr. Adrian Day, Chairman of Adrian Day Asset Management, said gold may need more time before entering a sustainable uptrend, although the Fed’s interest rate decision next month could change the situation. “I don’t think the price will drop much from the current level, the fundamentals are still supportive and outside cash flows will be ready to buy if the price adjusts,” the expert commented.
“Expect price increases”, is the comment of Mr. Rich Checkan, President and COO of Asset Strategies International, about gold prices this week. He analyzed that the fundamentals have not changed and central banks’ gold purchasing activities have not declined. He also believes that the recent downward correction and accumulation of this precious metal has been overdone.