Recent polls have revealed growing bearish sentiment among Wall Street analysts and Main Street investors. Accordingly, it is possible for the gold price to drop below $1,700 per ounce in the near term.
State of the gold market
Investors expect the Fed to aggressively raise interest rates to reduce inflation. Therefore, sentiment in the gold market has cooled in a few weeks. In this environment, real yields rose along with the US dollar. Thus, two major financial fluctuations emerged for the precious metal. However, the US dollar reached an important milestone, equaling the euro after 20 years. Therefore, gold prices fell to the lowest level in almost a year this week. Analysts said there was no major capitulation movement in the market despite gold falling to £1,700.
Alliance Financial gold dealer Frank McGee said he expects gold prices to fall as more traders have to liquidate their positions at a loss. In addition, senior technical analyst Jim Wyckoff shared what the technical outlook conveyed about market dominance. Accordingly, investors in a downward trend are in control of the market in the near term. “The charts are completely bearish,” Wyckoff said. Also, the path of least resistance for prices is clear. In other words, it continues to remain horizontally downward,” he said.
16 Wall Street analysts predicted the future of gold
16 Wall Street analysts participated in a survey organized by Kitcho News. Three of these analysts, 19%, expect a rise in gold in the near term. These analysts have a bullish forecast for the price of gold. However, six analysts (50%) expect the value of gold to decline. Five analysts, on the other hand, preferred to remain neutral for the price levels of gold in the coming week. In other words, the majority is expecting a decrease in gold prices.
Meanwhile, online Main Street polls also took place. In these polls, respondents gave 1,107 votes. 441 or 40% of the votes predict that gold will rise next week. Another 458 respondents, 41% of all votes, expect the price to drop next week. Finally, 209 voters, corresponding to 19%, preferred to remain neutral for the gold price in the near term. However, participation in the survey reached a one-month high. cryptocoin.comAs we have reported, investors are more cautious and skeptical towards the market.
Will gold prices increase?
There is a strong bearish sentiment in the market. However, some analysts are not ready to give up gold just yet. These analysts say the precious metal is technically oversold. That is, they argue that it is possible for the asset to bounce off its current prices. Darin Newsom, head of Darin Newsom Analysis, is among those who say gold is oversold. He claims that if gold can hold $1,695 on Friday, it will bounce back into the week. However, the same analyst predicts that the dollar will cool slightly next week. However, the markets expect a 100 basis point increase in interest rates from the FED after the CPI data. According to Forexlive analyst, this has the potential to trigger a relief rally for gold. However, the majority of the market is wondering if gold can hold the critical support at $1,675. If this level is lost, prices will fall further.
