Gold prices rose solidly on Friday afternoon, surpassing the $1,975 resistance, ending the week at a one-year high. According to analysts, investors rushed for gold late on Friday because no one wanted to end the week without buying some gold.
Investors entered the weekend by buying gold
cryptocoin.com As you can follow, gold recorded its best weekly price increase in three years. Analysts say this is the classic demand for a safe-haven asset. “You need to have some insurance over the weekend because you don’t know which bank is going to go bankrupt next,” says Phillip Streible, chief market strategist at Blue Line Futures.
Senior technical analyst Jim Wyckoff states that safe-haven demand has pushed up gold prices. However, the analyst says, “Gold is likely to see price weakness if the situation surprisingly improves over the weekend.”
The recovery of gold and even Bitcoin makes sense
According to some analysts, investors are gearing up for another potential ‘Signature Bank headline’ over the weekend. Last week, the Federal Deposit Insurance Corporation (FDIC) announced early Sunday that it had taken control of the New York-based bank. Treasury Secretary Janet Yellen, Fed Chairman Jerome Powell and FDIC Chairman Martin Gruenberg issued a joint statement Sunday evening in an effort to ease consumer fears, saying the government will protect all deposits in Signature Bank and Silicon Valley Bank, which was taken over by the FDIC on Friday. But despite the assurances, the risk of transmission appears to be increasing. Streible makes the following statement:
As consumers continue to move their money to larger banks, all regional banks are at risk of going bankrupt. No one is safe right now, so it makes sense for gold or even Bitcoin to recover.
$2,000 is now available for gold prices
Alongside safe-haven demand, analysts point out that gold and silver also benefited from some short positions as speculative positions prior to this week’s banking crisis showed a lackluster bullish trend. The Commodities Futures Trading Commission’s disaggregated Commitments of Traders report showing speculative positions for the week ended March 7 revealed that money managers had net longs below a four-month low of just 14,399 contracts.
With bullish speculative positions this low, market analysts say gold has ample room to climb to $2,000. Ole Hansen, head of commodities strategy at Saxo Bank, notes that breaking gold above $1,960 puts $2,000 into play.
I’m a golden beetle! Because…
According to Alastair Still, CEO of GoldMining, a company that runs gold and gold-copper projects in the United States, gold miners should invest in exploration rather than buybacks and dividends if they have any hope of meeting demand. Although Still sees challenges and constraints for the industry, the outlook for gold as an investment is very positive. In this context, he makes the following statement:
I am a golden beetle, I have been interested in gold for over 25 years of my career. That’s why I believe in shiny metal. I believe in the fundamentals behind the metal and the pricing of the metal. I think we are definitely in a period of inflation, the Fed is struggling. In such environments, the foundations for gold are always in place. This is a safe haven environment, people see it as a real store of value.
This year there will be 2 not 1 on the sign for gold prices!
As for the price outlook, Still believes the market will keep the yellow metal strong in the coming months. In this direction, he shares the following predictions:
I think this year we will see a ‘2’ in front of the gold price more often than we might see a ‘1’. So a price of $2,000 is certainly not any stretch of the imagination, especially when we’re looking at all-time highs. If you adjust for inflation at today’s rates, we’ve already seen $2,000 in gold. So it’s not unheard of and I think we’ll be there this year.
