The price of gold at the beginning of this week is at over $2,080 per ounce – a level never seen before – continuing to rise to over $2,119 on Monday, $2,135 on Tuesday, $2,150 on Wednesday and $2,162 on Thursday, before setting a new high of $2,195.23 on Friday afternoon (March 8).
Closing on Friday, spot gold reached $2,170.55 per ounce, while April 2024 gold futures reached $2,185.50, a 4% increase over the week, the highest weekly increase in 5 months.
The main driving force behind the gold price increase remains the expectation of a Federal Reserve interest rate cut and the attractiveness of safe haven assets in a world of many uncertainties.
Domestically, gold prices also increased significantly this week. Gold bullion on Saturday morning (March 9) was bought at VND 79.9 million per tael and sold at VND 81.92 million per tael, compared to VND 77.9 – 80.6 million per tael (buy – sell) a week earlier; plain gold rings surpassed VND 69 million per tael, nearly 10% higher than at the beginning of 2024.
Global gold prices.
The latest survey results from Kitco News show that the optimistic mood about the prospect of price hikes is overwhelming both Wall Street and Main Street.
Adrian Day, Chairman of Adrian Day Asset Management, said: “The price is about to pause, but gold is still getting momentum from new buyers – in addition to central banks. It is most investors in the West, both retail and institutional.”
Ole Hansen, head of commodity strategy at Saxo Bank, is one of the few analysts who predicts prices will decline next week. He said: “Price decline next week because this metal needs reinforcement after a strong gain.”
Sean Lusk, co-director of commercial hedging at Walsh Trading, believes that all signs indicate that this rebound is driven by the buying activity of central banks.
He said: “China is quietly reinforcing the market by buying additional reserves.” “Many central banks are buying, not only for themselves but also for others, to support their currency. I think that is still happening. There are many uncertainties globally at the moment, and I think that is an important part of the reasons behind gold’s records, because stocks are at record highs and gold is also at all-time highs.”
He added: “Political tensions have been going on for years.” “The Ukraine-Russia conflict began in 2022, the attack on Israel on October 7, 2023, and the subsequent closure of important shipping lanes, attacks on cargo ships in the Red Sea, an important area of the world, and crude oil prices have not been able to sustain at around $80 sustainably. All of that leads people to a safe haven investment, which is gold.”
Lusk said that even with gold at an all-time high, the trend is still upward. He said: “Now the price of gold is at an important level and has surpassed some technical analysis trends.”
Lusk added that of course, there is still reason to doubt whether gold prices will continue to rise, especially when everything else is in the red. “The stock market is rising unreasonably, every other metal is in the red, and energy is also in the red.” “The US dollar is only slightly down, but gold is rising strongly.”
After surpassing the price target expected by Walsh Trading, Lusk said he has reason to believe that it can double its superior performance in the future.
“2,175 USD is our previous target. I said the price would reach that level because it will rise 5% annually.” “So, can the market have enough strength to reach $2,278, equivalent to a 10% annual increase or not? The April futures contract is still the most positive traded contract and the price is at $2,180, meaning there is still $90 to reach our next predicted level. But just two weeks ago, no one thought that the next predicted level would not happen.”
This week, 14 Wall Street analysts participated in Kitco News’ Gold Survey, and the optimistic mood prevailed. Six experts, equivalent to 43%, expect gold prices to rise next week, an equivalent ratio predicts prices will trade sideways, and only two analysts, accounting for 14%, predict lower gold prices.
Meanwhile, 296 online surveys on Main Street showed the majority of investors on Main Street also predicted that gold prices will continue to rise. Specifically, 173 retail traders, accounting for 58%, expect gold to rise next week; 67 others, equivalent to 23%, predict prices will fall; while 56 respondents, equivalent to 19%, have neutral views on the short-term outlook for the precious metal.
Kitco News survey results on the prospects for global gold prices for the week of March 11-15.
Next week, the gold market expects data including: U.S. inflation data (CPI and PPI indices for February will be released on Tuesday (March 12) and Thursday (March 14), respectively, the last information that could influence the Fed’s decision prior to the FOMC meeting next week (March 19 and 20).
Markets will also follow the retail sales report and the weekly jobless claims and manufacturing data from Empire State and the University of Michigan Consumer Sentiment Survey released on Friday (March 15).
Basically, Fed Chairman Powell has said he does not expect rate cuts at the March FOMC meeting (March 19 and 20), meaning the U.S. dollar may remain stable for a while. Meanwhile, technically, the chart shows that the April 2024 gold futures contract is in an overbought condition. Therefore, the possibility of gold entering a correction phase cannot be ruled out. However, the long-term prospects for this metal are still believed by the majority of analysts and investors to be an increase.
Reference: Kitco News
