The gold market continues to hover in an unstable position. However, the $1,700 support under an ounce seems to be in jeopardy. There is very little uptrend in the market so the possibility of testing the mentioned support increases. Meanwhile, 17 Wall Street analysts participated in a survey and shared their price expectations for the gold next week.
“Watch out for this level next week”
cryptocoin.com As we reported, Wall Street continues to expect a slight rise in gold in the near term as the US dollar remains overvalued. However, bearish sentiment among retail investors has soared to a multi-year high. The bearish sentiment came as the US dollar ended the week at a 20-year high of over 109 points.
Darin Newsom, head of Darin Newsom Analysis, said he is optimistic that the gold market could pull off the bargain hunt and bounce back from support around $1,700 next week. However, he added that the medium and long-term outlook looks bleak. Then, Newsom stated that the broader trend continues despite the daily increasing volatility in the gold market.
“The US dollar is very strong and it is possible that some profits will support gold in the short term. But you cannot ignore the fact that investors still want to own US dollars. Because they see it as the safest asset on the market. Ultimately, gold stuck. Therefore, gold investors will mostly stay on the sidelines until they see something that will destabilize the US dollar rally.”
Wall Street analysts are on the rise
A total of 17 market professionals took part in the Wall Street gold forecast survey this week. Seven analysts (41%) said they were bullish on gold next week. Six analysts (35%) declared that they were in a bearish trend. Four analysts (24%) stated that they are neutral on precious metals. On the retail side, the situation was different. 898 Main Street investors took part in online surveys. A total of 337 investors (38%) expect gold to rise. 412 people (46%) predict that gold will fall. The remaining 149 voters (17%) foresee a horizontal market.
While gold prices are at their lowest levels, the precious metal is still looking to end its third week in negative territory. December gold futures were last traded at $1,725, down 1.4% from Friday. Wall Street analysts are optimistic for gold in the near term. However, they do not expect any breakouts. Marc Chandler, managing director of Bannockburn Global Forex, said that $1,740 remains the first resistance point it follows.
“Follow these developments for gold”
SIA Wealth Management chief market strategist Colin Cieszynski said monetary policy decisions by the Bank of Canada and the European Central Bank could affect the US dollar next week. Markets expect the Bank of Canada to raise interest rates by 50 or 75 basis points. In Europe, expectations for the ECB to raise interest rates by 75 basis points are rising steadily.
Adrian Day, Head of Asset Management, said that the euro could see some upward movement next week. Therefore, he said that gold will be bullish next week. He added that gold’s sales below $1,700 were excessive. Analysts waiting for a decline say that gold is hovering at a very dangerous level. Accordingly, they say that if gold prices drop below $1,685, the multi-year bull run may come to an end.
