Gold fell to a two-week low on Friday after data showing faster-than-expected growth in U.S. consumer prices last month helped support the case for the Federal Reserve to raise interest rates later this year and the dollar jumped.
The Federal Reserve is in the spotlight next week as investors anxiously wait on the central bank’s important September meeting to see if they will hurt gold by hiking interest rates.
The results of Kitco’s professional survey reflect significant uncertainty in the marketplace with most analysts unsure on gold’s short-term move. This week, 13 analysts and traders took part in the survey; of which 38% expect prices to move higher next week. The remaining participants – split evenly at 31% – see lower or sideways trading.
Despite a close race, Main Street appears to be a little more optimistic on gold next week based on the 1,251 votes tallied. A total of 591 voters, or 48%, are bullish on the metal next week while 530 voters, or 42%, and 130 participants, or 10%, are bearish and neutral, respectively.
Colin Cieszynski, senior analyst at CMC Markets, said higher gold prices are likely next week as a delayed Fed rate hike is likely.
“It could undermine the USD advance and give gold a chance to rebound,” he said.
However, Ken Morrison, editor of the newsletter Morrison on the Markets disagreed. Last week, he was calling for gold to decline some $20 to trade around $1,310 an ounce, which is what happened. This week, he said the prospects for a gold rally have not yet improved. “Open interest in futures has declined along with price indicating the dominant flow the past week has been the reduction of long positions,” he said. “I expect further strength in the Dollar that should pressure Gold below $1300 for the first time in 3 months.”
Reference: KITCO, Reuters
Thai
Eng