- At the end of last week's trading sessions, the price of gold rose to a new record level, approaching $2200 per ounce, after the recent US jobs report bolstered the view that US interest rate cuts could occur in June.
- The February jobs figure came in higher than expectations, but job gains in January and December were revised downward significantly, and the unemployment rate rose to its highest level in two years at 3.9%.
- Wage growth also slowed more than expected, indicating a slowdown in the labor market.
Overall, traders now see a roughly 60% chance of a 25-basis point rate cut by the Federal Reserve in June. Previously, US Federal Reserve Chairman Jerome Powell and several members of the European Central Bank have hinted that monetary easing is likely to begin this year, increasing the attractiveness of non-yielding assets. On a weekly basis, the price of gold moved to achieve gains of 4.2%.
All about Gold
The gold market is an attractive investment during times of political and economic uncertainty. Also, half of the world's gold consumption is in jewelry, 40% in investments, and 10% in industry. Moreover, the largest gold producers are China, Australia, the United States, South Africa, Russia, Peru, and Indonesia. Furthermore, the largest consumers of gold jewelry are India, China, the United States, Turkey, Saudi Arabia, Russia, and the United Arab Emirates. Finally, gold prices quoted in trading economies are based on over the counter (OTC) financial instruments and contracts for difference (CFDs).
Will the price of gold decrease in the coming days?
The gold price has risen by $118.11 per ounce, or 5.73%, since the start of 2024, according to trading on the contract for difference (CFD) that tracks the benchmark market for this commodity. Gold is expected to trade at $2067.94 per ounce by the end of this quarter, according to global macroeconomic models and analyst expectations. Looking ahead, we expect gold to trade at $2134.44 per ounce over 12 months.
Regarding the expected gold price in the coming days, Commodity analysts at ING Groep, in a note to Bloomberg, see gold prices trading higher this year as demand for safe havens continues amid geopolitical uncertainty with ongoing wars and the upcoming US elections. They added, "Gold prices tend to become more attractive in times of instability when investors flock to safe-haven assets as a hedge against economic climate, geopolitical tensions, or inflation." David Meger, director of metals trading at High Ridge Futures, told Reuters, "We still believe that the same underlying assumption remains valid, which is a mix of expectations that the US Federal Reserve will continue to cut interest rates later this year and weakness in the US dollar."
Gold Price Forecast and Analysis Today:
According to the performance on the daily chart, the overall trend for the price of gold remains strongly bullish so far. Its recent gains have been sufficient to push technical indicators towards levels of strong and sharp buying saturation. Therefore, caution should be exercised in triggering selling operations to realize profits this week, especially if the US dollar gains positive momentum in the event that US inflation figures exceed all expectations. Profit-taking sales may initially encounter support levels at $2140 and $2090 respectively. The current bullish outlook for the price of gold will not be reversed without a movement towards the $2000 per ounce level again.
Historically, the price of gold reached an all-time high of 2195.15 per ounce in March 2024.
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