This week, the gold market had a lot to think about. There were reports about how well manufacturing and services were doing, news about jobs, and a decision from the Federal Reserve about interest rates. While the prices of precious metals did go up a bit because the Fed said they wouldn’t raise interest rates and might even lower them later, overall, the prices went down. This happened because demand for gold in Asia slowed down a bit, and there wasn’t as much talk about tension in the Middle East in the news.
At the start of the week, gold was selling for more than $2,335 per ounce. But on Monday, it couldn’t stay above $2,340 for long. By Wednesday afternoon, it hit its lowest price of the week, dropping below $2,283.
After a while, the market started to get better again. When the Federal Reserve talked about interest rates and its chair, Powell, had a press conference in the afternoon, gold prices went up again, reaching over $2,325 per ounce.
But even though it tried again to go higher, the positive energy didn’t last, and gold prices went down again, settling around $2,300 per ounce. Except for a few times when it dropped to about $2,290, it stayed around that price for the rest of the week.
In the latest Kitco News Weekly Gold Survey, experts are feeling pretty negative about gold’s chances of doing well soon. They think gold prices might keep falling or stay pretty much the same.
Lukman Otunuga, who’s a Senior Research Analyst at FXTM, says things aren’t looking good for gold in the next few days. He says gold prices went down after some disappointing news about jobs in the US.
But Adrian Day, who runs Adrian Day Asset Management, still believes in gold for the upcoming week. He thinks gold has been strong even when central banks, especially the US Federal Reserve, haven’t been quick to lower interest rates. He says people who are buying gold, like global central banks and savers in China, aren’t just doing it because of regular economic reasons. They’re buying it for other reasons and are likely to keep doing so.
Marc Chandler, who’s in charge at Bannockburn Global Forex, thinks that next week, gold might not do so well. He says there might be less demand for gold from Asia, especially China. He thinks gold might drop to around $2,250-$2,260 per ounce.
Chandler also thinks that because the Chinese yuan is doing better and stocks in Hong Kong and mainland China are doing really well, some investors might not feel as much need to buy gold for safety. Plus, he says, the Japanese yen is getting stronger again, which might also slow down how much gold people in Japan buy.
Adam Button, who leads Currency Strategy at Forexlive.com, thinks that Chinese demand for gold will go up again next week when Chinese traders get back into the market after their holiday break.
In the latest Kitco News Gold Survey, 15 analysts from Wall Street shared their views. After two weeks of gold prices going down a bit, most of them think gold will keep dropping in the short term. Only four of them, which is about 27%, expect gold prices to go up next week. Five analysts, about 33%, think the prices will go down. Six of them, which is 40%, believe gold will keep trading in the same range without much change.
In a poll on Kitco’s website, 217 people gave their opinions. Most regular investors, also known as Main Street investors, don’t expect gold prices to go up soon. About 47% of them, which is 102 people, think gold will rise next week. 28% of them, which is 61 people, predict that gold will be cheaper. And 25% of them, which is 54 people, think gold will stay pretty much the same in the coming week.
Next week, there won’t be much new economic information coming out. The important things happening are a bond auction on Wednesday for 10-year bonds, a decision from the Bank of England about money stuff, and another bond auction on Thursday for 30-year bonds. On Friday, there will be some information released about what consumers are feeling, called the Preliminary University of Michigan consumer sentiment.
One person, Chandler, thinks that since there aren’t any big signs coming out next week, he’ll keep an eye on how governments are selling bonds to see if that tells us anything about where the market might be going.
Darin Newsom, who works as a Senior Market Analyst, was talking about all the economic news from this week. He said that nothing new came out about how the U.S. economy is doing. He thinks that the monthly job numbers that come out are more for fun than for real information. He finds it funny how these numbers are often way off from what experts expect. He describes it as a game where people try to guess blindfolded where to put the tail on a donkey, but nobody’s very good at it.
Newsom talked about signs indicating the U.S. economy might not be doing so well. He mentioned how Starbucks sales were down, not just because coffee prices were higher, but because fewer people were coming in to buy coffee. This suggests Americans might be changing their spending habits, like skipping their daily expensive coffee.
Another sign of trouble was the big drop in demand for boxed beef last month. Normally, demand goes up in summer when people grill more, but this time it went down. Newsom wonders if Americans are finally tightening their belts after years of being told the economy is bad. Are they cutting back on daily luxuries like pricey coffee and expensive meat cuts?
He said these were the important things he noticed this week, more important than other stuff like inflation. He also talked about gold, saying it seems to be losing some steam after a big rise. But he thinks in the long term, gold will still be valuable because of things like inflation and global tension.
Overall, he thinks gold will still be a good investment, even though it’s taking a break from being super popular. Another expert, Jim Wyckoff, agrees and thinks gold prices will stay high next week.
Right now, gold is selling for $2,301.56 per ounce, a tiny bit down from earlier.
