What Will Be the Gold Price Next Week After Six Consecutive Record-Breaking Sessions?

Gold prices surged this week, capping off the strongest quarterly gain in eight years. The precious metal has been on a rally since the US began its monetary easing cycle with a 50-basis point rate cut, boosting gold’s appeal.

Spot gold ended the week at $2,643.88, after hitting an all-time high for six consecutive sessions, peaking at $2,685.42 per ounce; December gold futures ended the week at $2,668.1 per ounce.

Domestically, gold prices continued to climb. Gold bars


SJC rose to


81.5 – 83.5


million VND per tael (buying – selling), up from 80-82 million VND per tael last week; SJC gold rings 9999 also increased to 82.75 – 83.45 million VND per tael, from 78.7-80 million VND per tael a week ago.

Notably, after six consecutive sessions of gains, gold prices turned lower on Friday (Sep 27).

Gold, traditionally a hedge against geopolitical and economic uncertainties, has risen about 14% in Q3, the biggest gain since the first quarter of 2016. Year-to-date, gold prices have climbed nearly 28%, the most in 14 years.

The Kitco News survey showed that experts were evenly split on their predictions for gold prices next week, while most retail investors remained bullish on the metal.

“Prices will rise,” said Darin Newsom, senior analyst at Barchart.com. “Applying Newton’s First Law of Motion to the markets: An object in motion will stay in motion until acted upon by an external force. That external force is usually investor activity, and with the potential for global chaos next month only increasing, there is little chance investors will change their minds about gold as a safe-haven.”

“I see prices falling because I believe the rally is driven by FOMO and traders using derivatives,” said Ole Hansen, head of commodity strategy at Saxo Bank, adding that “in the short term, physical gold demand is likely to be weak until investors adjust to this very high price level.”

“Another reason for the rally to pause is China, where the affluent middle class has been buying gold heavily as their stock market came under pressure and property prices fell. However, after announcements of economic stimulus packages, the Hang Seng Index rose 13%, while the Shanghai CSI 300 Index climbed nearly 17% last week. Will these initiatives have a positive impact on consumer sentiment and the real estate market? If so, it will lead to a decrease in the focus on gold as a safe investment. The answer is: Wait and see,” said Hansen.

“Prices will be unchanged,” said Adrian Day, president of Adrian Day Asset Management. “It’s time for prices to pause after such a strong rally. This also often happens after the impact of the first Federal Reserve (Fed) rate cut fades.” “In the next 6-12 months, I can’t be optimistic that gold prices will rise further because the market can’t go up forever, although Western investors are finally starting to buy gold,” said Day.

Marc Chandler, CEO of Bannockburn Global Forex, said the big news last week was China’s effort to ‘reflate’ its economy. “Even though Chinese retail gold demand has slowed, Indian demand still seems strong,” he said. “Technically, momentum indicators for gold are overstretched. Even though US GDP/GDI data was revised higher and weekly jobless claims fell, reducing the likelihood of another 50-basis point cut by the Fed in November, other central banks, including Canada and Sweden, could accelerate the pace of their rate cuts.” Chandler added: “The US jobs report, due next week, will be crucial. If the data is weak, it could push gold prices higher.”

Kevin Grady, president of Phoenix Futures and Options, said he saw no reason to be concerned about the gold price trend, despite Friday’s dip. “You’ve seen gold prices go through an impressive rally.” “I think you could see both markets [stocks and precious metals] go up. I think that’s a good environment. I think the correction is normal because the correction is healthy. Prices can’t go up forever. I think the interest rate picture will continue to favor both metals and stocks.”

Some argued that gold had been “oversold.” Despite this, some banks predicted gold could hit $3,000.

“Hitting $3,000 per ounce this year is very possible. There are a lot of things that could drive prices up,” said Phillip Streible, chief market strategist at Blue Line Futures. “You could see Middle East peace talks fail, the US labor market could continue to weaken, the Fed could cut rates by another 50 basis points, and China could announce more stimulus… all of which would support the gold market,” Streible added.

This week, out of 14 Wall Street professionals polled in the Kitco News survey, six, or 43%, expected gold prices to rise next week, while six predicted lower prices. The two analysts, or 14%, who were neutral on prices, completed the survey before the Fed’s rate decision.

Meanwhile, out of 192 Main Street investors, the majority remained optimistic, although the percentage of bullish predictions fell slightly from last week. Specifically, 120 voters, or 62%, expected gold prices to rise next week, while 38 people, or 20%, predicted lower prices, and the remaining 3 voters, or 17%, were neutral.

The most awaited gold market news next week is the US non-farm payrolls report for September, due Friday. Other critical data include Europe’s CPI, released Tuesday; manufacturing PMI, US jobs report, released Wednesday; and weekly jobless claims and US services PMI, released Thursday.

Reference: Kitco News