Potential progress in ceasefire talks between Russia and Ukraine this week could dampen demand for gold as a safe-haven asset.
The latest results from the weekly survey of gold showed that the majority of Wall Street analysts are bearish in relation to the prices of the precious metal. Even though retail investors remain optimistic in the short term, sentiment is down sharply from the previous week.
Western analysts are divided: while some expect prices to fall this week, many believe the market is in a new consolidation pattern with initial support in the $1,880 to $1,900 range.
Sean Lusk, co-director of commercial hedging with Walsh Trading, said he still sees lower prices as a long-term buying opportunity.
Last week, 18 Wall Street analysts took part in the gold review. Among the participants, five analysts, or 28%, voted for the rise in prices this week. At the same time, ten analysts, or 56%, are bearish on gold, and three, or 17%, are neutral.
In an online poll on Main Street, 604 votes were cast. Of these, 336 respondents, or 56%, expect gold prices to rise. Another 170 voters, or 28%, announced a reduction, while 98 voters, or 16%, were neutral.
For gold, sentiment has changed significantly from the previous week, with 71% of analysts and 72% of retail investors expecting higher prices last week.
Adrian Day, president of Adrian Day Asset Management, said he was also bearish.
Gold prices lost momentum last week after Russia and Ukraine started new peace talks in Turkey. Ukraine has reportedly offered to accept a neutral status in exchange for security guarantees. At the same time, Russia has reduced its military operations near Kyiv and Chernihiv in order to concentrate its forces in the Donbas.
Another factor along with the change in sentiment is the aggressive stance of the Federal Reserve in monetary policy, which may put pressure on precious metals in the near future. On Wednesday this week, the minutes of the March meeting of the Fed on monetary policy will be published. And any hawkish bias in the protocol could be reflected in gold prices.