(Kitco News) – The gold the market is holding at around $1,800 an ounce despite increasing hawkish rhetoric from central banks around the world; the bullish sentiment in the market points to a positive ending for the precious metal for 2022.
The latest news from Kitco shows that retail investors are still very bullish on gold approaching the last full trading week of the year. Meanwhile, Wall Street analysts are slightly more cautious, with many saying a drop gold prices represent a strategic buying opportunity.
Although the Federal Reserve has signaled that it is far from ready to end its tightening cycle, analysts note that the market is starting to ignore the hawkish stance. Some analysts said investors are now focusing on growing recession fears and moving away from the inflationary threat.
The Fed isn’t pumping breaks yet, but it’s taking its foot off the accelerator, and that should help gold consolidate around $1,800,” said Frank Cholly, senior market strategist at RJO Futures.
Christopher Vecchio, head of futures and forex at Tastylive.com, said weaker economic growth is helping to lower real yields, which continue to support gold around $1,800 an ounce.
“I think gold is currently well positioned to start the new year on a high note,” he said.
This week, 20 Wall Street analysts participated in the Kitco News Gold Survey. Among the participants, nine analysts, or 45%, were bullish on gold Short term. Meanwhile, five analysts, or 25%, were bearish for the next week and six analysts, or 30%, saw prices trading sideways.
Meanwhile, 772 votes were cast in a Main Street online poll. Of these, 437 respondents, or 57%, expected gold to rise next week. Another 202, or 26%, said it would be lower, while 133 voters, or 17%, were short-term neutral.
The gold market is looking to end the week in roughly distant territory, with prices down 0.5% from last Friday. February gold futures last traded at $1,800 an ounce.
Adam Button, head of currency strategy at Forelive.com, said he expects to see lower prices next week as hawkish comments from the central bank could weigh on prices.
Not only has the Federal Reserve not finished raising interest rates, but European Central Bank President Christine Lagarde has warned investors that the ECB should continue to raise interest rates by 50 basis points. base until 2023.
However, Button added that any drop in price could be a buying opportunity as this season is a strong time for gold.
“Even holding steady for the rest of the month would be a win and set gold up for a nice rally in January,” he said.
While gold has remained resilient as central banks tighten monetary policies around the world, some analysts have noted that bullish momentum is beginning to weigh as resistance holds around $1,800 an ounce.
“Momentum indicators haven’t recovered. I still think a bigger pullback could happen, but so far [gold has been] more resilient than I thought,” said Marc Chandler, managing director of Bannockburn Global Forex. “It seems to correspond to a US dollar, which seems better offered during rallies than bought during declines.
Darin Newsom, senior market analyst at Barchart, said he sees the US dollar entering a short-term uptrend helping to push down gold prices.
“Last week’s call for a lower market still works unless February gold shows a strong rally to close Friday. If not, then the contract will have completed a peak. bearish reversal on its weekly chart, confirming the secondary (intermediate)-term downtrend,” he said.
Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accepts no responsibility for loss and/or damage resulting from the use of this publication.
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