Gold price increases sharply, experts make surprising comments

The most dramatic moves in the gold market were made earlier this week, with spot prices starting trading on Sunday night above $2,041 an ounce before falling to $2,016 an ounce by 9 a.m. Monday.

Gold prices have since largely traded within that range, although the spot market set a weekly high of $2,042.53 an ounce on Wednesday morning and tested support near $2,021 on both Thursday and Friday.

The latest Kitco News weekly gold survey shows that a majority of experts and investors have a positive forecast for gold prices next week.

Gold price forecast for next week. Source: Kitco

This week, 12 analysts participated in the Kitco News Gold Survey, and Wall Street is mostly bullish on gold in the coming week. Four experts, or 42%, expect higher prices next week, while only one analyst, or 8%, predicts lower prices. Six experts, or half of those surveyed, predict sideways prices next week.

Meanwhile, 165 votes were cast in Kitco’s online poll, with a near majority of investors remaining bullish. 77 retail investors, or 47%, expect gold to rise next week. Another 37, or 22%, predict lower prices. 51 respondents, or 31%, are neutral on the precious metal’s near-term outlook.

“Gold has fallen after Federal Reserve Chairman Jerome Powell dampened expectations of a near-term rate cut. Now gold may find its footing and start rising again,” said Adrian Day, president of Adrian Day Asset Management.

James Stanley, senior market strategist at Forex.com, has returned to the bullish camp after being skeptical about gold's short-term potential last week: "So far, the uptrend has held the $2,000/ounce level. Even with the dollar's biggest two-day rally in a year, gold has held support."

Stanley believes the next price move will be driven by the US CPI report. “If we see core CPI rise above 4% year-on-year, that could be negative for gold. But I expect CPI to ease slightly and that could provide an opportunity for bulls,” he said.

Marc Chandler, CEO of Bannockburn Global Forex, said: “I expect gold to rise in the coming days, thanks to weak inflation and falling US retail sales. I expect those data to limit US bond yields and the US dollar.”

On the other hand, Bob Haberkorn, senior commodities broker at RJO Futures, sees downside risk next week: “If gold falls below $2,000 an ounce, the precious metal could return to $1,950 an ounce and possibly even beyond that.” Bob Haberkorn stressed that the short-term direction of gold will really depend on inflation data.

Meanwhile, Mark Leibovit, publisher of VR Metals/Resource Letter, said he still sees gold prices likely to fall in the near future.

US inflation data will once again take center stage next week, with the January CPI report due on Tuesday morning, and the first January PPI on Friday, experts say.

Markets will also be looking at weekly jobless claims and US retail sales for January, as well as manufacturing indexes from the Philly and New York Feds, all due Thursday morning. Then there are data on housing starts and building permits for January.

Not only world gold, domestic gold next week also has many motivations to increase price. Although domestic gold in recent sessions has fluctuated with a narrower amplitude than the previous period, however, the price of this metal is expected to increase higher on the occasion of God of Wealth (10th day of the first lunar month).

Along with that, the difference in gold price on God of Wealth day is usually pushed higher than other trading sessions.

As of 12 noon on February 11, DOJI Group listed the SJC gold price at 76.55 million VND/tael for buying; the selling price was 78.85 million VND/tael. Saigon Jewelry Company listed the gold price at 76.7 million VND/tael for buying; the selling price was 78.9 million VND/tael.

World gold price listed on Kitco is at 2,024.4 USD/ounce.

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