Gold could return to $2,000 an ounce next week
Wall Street experts expect gold prices to return to the $2,000 per ounce mark, after two weeks of trading below this threshold.
Results of the weekly surveyKitcoshows, analystsWall Streetare leaning towards positive gold price forecasts next week. 12/15 experts predict gold prices will increase, 3 opinions say the market will go sideways and no experts predict prices will decrease.
In contrast to the optimistic view of analysts, retail investors are somewhat more cautious, although the bullish forecast still dominates. Of the 2,375 investors surveyed online, 1,356 respondents - equivalent to 57% - forecast gold prices to rise, 24% predicted gold prices to fall and 19% were neutral.
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| Kitco's survey results on gold price forecast for next week. Photo: Kitco |
"Technically, gold is leaning lower next week, but I wouldn't sell gold at this point," said Darin Newsom, president of Darin Newsom Analysis. "Gold and silver are the only things investors want to hold in this uncertain environment."
Many analysts are betting on gold because of concerns about inflation in the US. In a recent speech, US Federal Reserve Chairman Jerome Powell said that he would aim for an average inflation target of 2%, meaning that after a period of very low inflation, the rate could push above 2%.
"The Fed's new stance makes gold an indispensable asset," said Adrian Day, chief executive of Adrian Day Asset Management. "Gold has had plenty of room to correct in the past few weeks, but a downward trend seems unlikely."
Afshin Nabavi, head of trading at MKS SA, also remains bullish as the precious metal has held key support above $1,900 an ounce. "You just have to look around at what's happening in the world. Everything points to higher gold prices," Nabavi said, predicting that gold will soon return to $2,000.
Charlie Nedoss, senior strategist at LaSalle Futures Group, is also optimistic about the Fed's guidance on accepting higher inflation to support the labor market. He said gold could retest the $2,000 resistance level next week, but the market will be more confident if the precious metal is pushed above $2,010.