Gold price next week: Not optimistic yet

08/20/2023 07:21 Nhat Linh Print article

ANTD.VN - World gold prices have experienced their fourth consecutive week of decline and experts are not optimistic about the prospects for the precious metal next week.

Growing concerns that the US Federal Reserve will keep interest rates on hold longer than expected in its fight against inflation are taking a toll on gold, with prices ending the week near a five-month low, marking the fourth straight weekly loss for the precious metal.

Accordingly, the updated spot gold price on Kitco closed at $1,889.5/ounce, down $23.5/ounce for the week. The December gold price also ended the week at its lowest price in five months, at $1,918.4/ounce.

No positive signals for gold prices next week

Domestically, gold prices reacted quite opposite to developments in the international market. SJC gold even increased with the closing price of the week around 67.00 - 67.72 million VND/tael, an increase of 200 thousand VND/tael compared to the previous weekend.

While there is still optimism that gold could regain its luster later this year, analysts are warning investors that a lot of short-term technical damage has already been done and the precious metal is likely to fall further next week.

Analysts note that despite high economic uncertainty as China’s economy shows signs of strain, the precious metal has not received much investor interest as a safe-haven asset, as rising US Treasury yields, which hit a 15-year high on Thursday, have become significant competition for gold.

Some analysts note that holding 3-month US Treasury notes with a 5% yield has become more attractive compared to gold.

Still, analysts expect markets to remain “silent” as investors wait until Friday when Fed Chairman Jerome Powell speaks at the central bank’s annual meeting in Jackson Hole, Wyoming.

Recent economic data has provided little guidance on the health of the world's top economy, so analysts expect next week's Jackson Hole symposium to be a good opportunity for Chairman Powell to begin laying the groundwork for the next evolution in the Fed's monetary policy direction.

There are growing expectations that Powell will strike a more dovish tone even as he said the central bank would keep its options open and remain data-dependent. And even Powell’s neutrality was enough to support gold prices as it suggested bond yields had peaked.

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