Gold price falls for 2 consecutive weeks but still aims for 5000 USD
World gold prices fell 11% after two consecutive weeks, but experts still expect the precious metal to soon reach the 5,000 USD/ounce mark next year.
The world gold price is currently trading around $4,000/ounce. In the past two weeks, the precious metal has fallen about 11% from its recent peak, reflecting a natural correction after a long streak of increases.
Gold prices continued to decline this week, despite positive US-China trade negotiations and an unclear interest rate cut cycle. Opening the week at $4,104/ounce, gold prices quickly fell to $3,978/ounce on Monday morning. Although they reached a high of $4,110/ounce at one point, the decline continued throughout the first session of the week, causing gold prices to lose nearly $130 in just one trading day.
After a sharp fall, gold prices recovered to $3,969/ounce on Tuesday afternoon, then advanced to $4,026/ounce on Wednesday morning. However, after Fed Chairman Jerome Powell warned that a December rate cut was “not certain,” gold prices fell sharply to $3,929/ounce in the US session. In the late afternoon session, gold prices continued to fluctuate around $3,920 - $3,975/ounce, reflecting the market's indecisive sentiment before the Fed's statement.
Since Thursday, gold prices have gradually recovered and remained stable around the $4,000/ounce mark. In the evening session of the same day, gold prices reached $4,037/ounce before adjusting slightly. At the end of the week, the gold market traded in a narrow range of about $60, with an average of around $4,000/ounce. This stability shows that supportive buying power is still maintained, despite pressure from unclear monetary policy.
Investors are turning their attention to a slew of important economic data due out next week. Next week, the Institute for Supply Management (ISM) will release its manufacturing and services PMI indexes, along with the ADP private sector employment report.
Additionally, the Bank of England's monetary policy decision and the University of Michigan's consumer confidence survey are also closely watched, as they could directly influence the short-term gold price trend.
Although the world gold price is likely to decrease further in the short term, the market still shows relative stability at this high price range, as investors consider this a "breathing" period to prepare for a new growth cycle.
At the London Bullion Market Association (LBMA) Annual Conference, delegates predicted that gold prices could test the resistance zone of nearly $5,000/ounce by 2026, equivalent to an increase of about 25% compared to present.
Major banks such as HSBC, Bank of America and Société Générale also agree that gold prices will reach $5,000/ounce next year. In addition, Metals Focus forecasts gold prices to reach $5,000 and silver prices to reach $60/ounce in the same period.
According to experts, gold prices are still supported by global geopolitical tensions and expectations that the US Federal Reserve (FED) will loosen monetary policy, causing the USD to weaken.
While the World Bank only forecasts a 5% increase in gold prices by 2026, and Natixis sees an average price of $3,800 an ounce, these predictions are not bearish. In fact, gold prices are now more than 180% higher than they were between 2015 and 2019.
Gold prices continue to be supported by increased purchases by central banks to diversify their foreign exchange reserves. According to the World Gold Council, purchases reached about 200 tons in the third quarter alone and are expected to reach 900 tons in 2025. Despite purchases of more than 3,000 tons in the past three years, demand for gold remains high.
The Bank of Korea said it is considering buying more gold in the medium to long term - a move that shows confidence in the prospect of future price increases.