The gold market closed the week down nearly 4 percent, making its worst weekly close since mid-June 2021. However, according to analysts, gold’s current price level of around $1,800 per ounce may expose gold to a greater risk of selling. As Kriptokoin.com, we report the expected levels and analyst views for gold prices next week.
Gold prices under pressure
Gold is under technical selling pressure after falling below $1,830 an ounce on Thursday. Precious metals also come under pressure from the higher US dollar and the expectation of an aggressive Federal Reserve following higher-than-expected inflation data. June Comex gold futures fell more than $70 a week to $1,809.90 an ounce. TD Securities analysts said:
We saw CPI come in stronger than expected this week. The 8.3 percent inflation in April affected the markets negatively, especially after the 8.1 percent expectation of the markets. This automatically shows us that the Federal Reserve cannot soften its hawkish stance.
Global strategy head Bart Melek said the likely range for gold next week is $1,830 to $1,790 and added:
Better-than-expected economic figures, especially Gold risks falling further if we see higher energy prices or disappointing crop data. If the Fed’s rate hike forecasts rise, gold will take a further hit. Inflation is unlikely to drop sharply anytime soon. This outlook has pressed gold and the precious metal has dropped significantly. $1,830 was a good support but we surpassed it. Gold is consolidating while the next level of support is at $1,790.
Despite risks, these levels could be seen in a few weeks
amid massive sell-off in US equities this week, with the S&P 500 falling 18 percent since late December Gold was also used for liquidity purposes. Everett Millman, precious metals specialist at Gainesville Coins, commented on gold:
Gold’s decline is because investors are covering losses elsewhere. Investors are liquidating their savings to compensate for the large losses seen in the stock markets. Gold is one of the easiest things to cash out in difficult times. Looking ahead, gold risks a bigger sell if $1,800 is broken. However, due to the ongoing volatility in all markets, investors need to expand the trading range of gold in the short term. There is currently a risk of a drop below $1,800. But despite the downside risks, we can still climb above $1,900 in a few weeks.
RJO Futures senior market strategist Frank Cholly said that a lot of money has been withdrawn from all markets, including equities, crypto and gold, this week. What matters now, according to Cholly, are the techniques at $1800 per ounce of gold. Cholly pointed out the following regarding gold:
This is a big level and it could be $1,775 on the charts. The market at least stalls here and remains sideways as it builds another foundation and recovers. The market for gold is currently oversold and it wouldn’t be surprising if it bounced back to $1,865 an ounce and then to $1,900 an ounce. Gold sales are exaggerated and at this level it is closer to the bottom than the top. A close above $1,840-1,850 is needed to encourage movement. Investors should watch the US dollar and interest rates.
