The gold market closed the week on a more or less horizontal note as prices continued to trade around $1,850. However, it’s worth looking a little deeper into the precious metals market, as physical demand has seen a phenomenal increase over the past month. Market analyst Christopher Lewis notes that gold continues to dance around the 50-Week EMA. We have compiled analysts’ gold forecasts and market comments for our readers.
“More attention should be paid to physical gold demand”
The US Mint reported last month that it was the best May performance since 2010, selling 147,000 ounces of gold. To offset any potential Covid-19 market disruption, demand for gold bullion is up 400% from its five-year average from 2015 to 2019.
Analysts point to a growing dichotomy between physical demand in the gold market and the paper market. As you can follow on Cryptokoin.com news, gold futures prices were restrained by rising bond yields and the US dollar, which was strengthened by the Federal Reserve’s aggressive rate hikes over the summer.
According to analysts commenting on gold forecasts, more attention should be paid to physical gold demand to gauge a real market sentiment and investment anxiety. So, as recession fears continue to mount, you can’t be blamed for feeling a little more anxious.
This week, JPMorgan Chase CEO Jamie Dimon warned investors to prepare for an economic ‘hurricane’. “This hurricane is ahead of us,” Dimon said at a conference held by AllianceBernstein Holdings on Wednesday. We don’t know if it’s a minor storm or Superstorm Sandy. You better prepare yourself,” he said.
Is a recession inevitable for the USA?
Bank of America (BofA) also points to the growing threats of recession as energy prices continue to rise, even if it is not the baseline scenario. In a recent report, Francisco Blanch, head of global commodities and derivatives research at Bank of America Securities, assesses:
Can the global economy continue to expand by tightening oil supplies? Our estimates show that the world can handle a total cut of about 2 million bpd of Russian oil without risking a global recession.
Despite high levels of investor concern, some officials say that with a strong labor market and solid consumer spending, the US can still avoid a recession. Former Bank of Canada Governor Stephen Poloz says in an interview there is an “important window” to avoid a recession as central banks normalize their monetary policy.
Gold forecasts and weekly technical analysis
Market analyst Christopher Lewis says that gold markets fluctuate during the trading week as we are hanging on the 50-Week EMA and continues his analysis in the following direction. . At this point, it looks like the market is likely to continue to see a lot of noisy behavior below the bullish line offering some support near the $1,800 level. As long as we stay above the $1,800 level, we may have buyers coming to retake this market.
If we climb above the miniature double top we just made on the last two canvases, we’ll likely open a possible move to the $1,900 level. The $1,900 level is a big, round, psychologically important figure, and it’s also an area where we’ve seen support before. If it rises above this level, the market is likely to eventually move to the $2,000 level. However, the market will likely continue to see a lot of noisy behavior so I think it’s only a matter of time before it rebounds, but it will also be a very difficult trade to hold on to.
Therefore, you need to keep the position size reasonable as volatility will be difficult to settle in at times. However, the market will likely see a lot of noise, but pay close attention to the overall interest rate situation because if rates start to drop it will push gold back up. Alternatively, if we start to see massive increases, it will work against gold and pull us further down. It is worth noting that just below it is a two-year trend line.
