(Kitco News) – Gold and silver continue their strong upward trend, but some analysts say recent momentum appears to have peaked and investors should brace for firmer prices next week. It is said that
Both gold and silver were volatile again on Friday as the precious metals were unable to sustain their significant gains earlier in the day. Gold prices rose more than 4% on the day, reaching $2,448.80 per ounce. But the yellow metal is now nearing the beginning of the week. June gold futures were trading at $2,355.60 an ounce, up 0.4% from last Friday.
Silver, on the other hand, managed to maintain its outperformance against gold despite posting a similar rally on Friday afternoon. Silver prices hit a three-year intraday high of $29.905 an ounce on Friday morning. However, once the dust settles, the pair will likely end the week holding support above $28 an ounce. Silver futures for May contract were trading at $28.105 an ounce, up 2% from last week.
Although gold prices failed to hold above $2,400 an ounce, analysts believe the price remains relatively strong as gold prepares to set a new weekly closing record. It is pointed out that it remains the same. The new record comes even as markets have begun pricing in the possibility of a June interest rate cut after March’s higher-than-expected inflation rate.
According to the CME Fed Watch Tool, the market sees just a 27% chance of a rate cut in June, down from 50% last week and 68% a month ago. But analysts say that while the Fed may delay the start of its easing cycle, it is unlikely to raise rates again and real interest rates could still fall, a favorable environment for gold. Pointed out.
While gold remains well supported, some analysts say the rally is becoming too much.
Naeem Aslam said: “I think the momentum remains strong, but at the same time it’s not right to get greedy.Given the incredible rise in gold prices we’ve seen so far, I think it would be prudent to lock in some profits.” I’ll think about it.” , Chief Investment Officer of Zaye Capital Markets.
Philip Newman, director and founding partner at Metals Focus, also said it may be a good idea for investors to take some of their profits off the table. He said the gold market is likely heading for some correction following the unprecedented rally in record territory.
“We don’t expect a significant decline, but we think a short-term correction makes sense at these levels,” he said.
Ole Hansen, head of product strategy at Saxo Bank, said that while the price momentum was extreme, they were closely monitoring the recent volatility and were focusing on the broad trends driving prices.
He noted that gold remains solidly supported, in part due to rising inflation concerns and growing uncertainty about the health of the global economy.
“Right now, the market is trying to break something out before it actually breaks. As a result, the market is going to be exposed to a correction. Am I going to take my chips off the table? Because I’m in it, so “I don’t think in the long run,” he said. “I’m still wondering what will happen if economic indicators start to weaken and inflation still rises. That would justify gold’s performance.”
All eyes are on gold in US dollar terms, with record gains against all major currencies. Hansen noted that gold is up 20% against the euro, 22% against the Australian dollar, and 26% against the Japanese yen and Swiss franc.
Christopher Vecchio, head of futures strategy and foreign exchange at Tastylive.com, said that while he likes gold and silver, he has no intention of chasing the market at current levels. He added that he is considering buying on the spur of the moment.
“Despite solid economic growth and stubborn inflation, the Federal Reserve has said its next move will be to cut interest rates, which will push real yields higher and be good for gold and silver,” he said. It’s going to be the environment.” .
Market sentiment is expected to drive price trends in precious metals markets, but some economic data could add to the recent volatility.
Key data to watch next week include regional manufacturing statistics, March retail sales and housing statistics. Federal Reserve Chair Jerome Powell is also scheduled to speak in a debate with Bank of Canada Governor Tiff Macklem next week.
The International Monetary Fund will also hold its annual spring meeting in Washington, D.C., next week.
Economic data to watch next week:
Monday: US retail sales. Federal Reserve Bank of New York Empire State Survey,
Tuesday: U.S. building permits and housing starts, Fed Chairman Jerome Powell and BOC President Tiff Macklem give speeches
Thursday: Weekly Unemployment Insurance Claims, Philadelphia Federal Reserve Manufacturing Survey, US Existing Home Sales
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