(Kitco News) – Rising inflationary pressures and heightened economic uncertainty continue to generate strong bullish sentiment in the gold market among market analysts and retail investors, according to the latest gold survey from Kitco News.
Volatility has accelerated in the gold market this week. Still, analysts said a Goldilocks environment for the precious metal could push prices back above $ 1,850 an ounce, a vital technical area representing a critical retracement level and a 200-day moving average.
“The question is: will the hands of the Federal Reserve be forced to raise interest rates earlier than expected due to rising inflation,” said Robin Bhar, an independent market analyst. “Although inflation is rising, due to the economic data that we have seen, I think the Fed has room to be patient and that will support gold. As economies reopen, inflation is justified in pushing up, but the economic data is still patchy. “
This week, 13 analysts took part in the Kitco News gold survey. Of these, ten analysts, or 77%, said they were bullish on gold; at the same time, an analyst at 8% said prices were bearish next week. Two analysts, 15%, said they saw gold prices trading sideways.
Meanwhile, a total of 464 votes were cast in a main street online. Of these, 330 respondents, or 71%, have looked for a rise in gold next week. Another 80 respondents, or 17%, said less, while 54 voters, or 11%, were neutral.
Due to technical issues, participation in the Main Street surveys was significantly below average.
Sean Lusk, co-director of trade hedging at Walsh Trading, said he was bullish on gold not only because inflation heats up, but also because of growing geopolitical tensions in the Middle East as the conflict between Israel and the Palestinians in the Gaza Strip continues. intensify.
“I think we can expect gold prices to attract safe-haven flows in the coming weeks and that could push prices back above $ 1,850 an ounce,” he said. he declares.
Lusk added that his goal is for gold prices to eventually recover to $ 1,900 an ounce and be year-neutral before starting another strong uptrend.
Adrian Day, chairman of Adrian Day Asset Management, said he was bullish on gold, with investors once again embracing the precious metal as a hedge against inflation.
“Sentiment has changed and investors who ditched gold in the second half of last year are back, along with inflation. The Federal Reserve can say that inflation is only temporary, but the gold market doesn’t believe it, ”he said.
Darin Newsom, chairman of Darin Newsom Analysis, said he was bullish on gold in the near term. He said he expects to see further technical weakness in the US dollar. However, he added that the $ 1,843 level could represent a short-term resistance level.
However, not everyone expects gold prices to explode again. Adam Button said that after going above $ 1,800 an ounce last week, the precious metal could be due to side price action.
“Gold has had a great rebound from March lows. Now is the time to consolidate before the next step, ”he said.
Marc Chandler, Managing Director of Bannockburn Global Forex, said that while the precious metal has been stronger than expected, he is still a little cautious when it comes to continuing the rise in gold. He added that the market is a bit crowded.
“Gold seems to want to retest the 1845-1850 area, which holds the 200-day moving average,” he said. “Momentum indicators are strained. I would be more inclined to sell strong early next week, but keeping a keen eye on returns. ”
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