Gold steadily declined last week, holding above the $1930 per ounce mark. According to the results of the weekly survey for the current week, retail investors maintain a bullish sentiment. However, market analysts are clearly bearish in their assessments of the short-term prospects of the yellow metal.
John Weyer, Director of the Commercial Hedge Division at Walsh Trading, said the demand for gold as a safe haven is weakening. This is because the game of seeking refuge with Israel and Gaza has subsided, and the situation there has almost stabilized.
Federal Reserve Chairman Jerome Powell's speech on Thursday about the Fed's continued readiness to raise rates also had an impact. However, Weyer does not believe that the Fed will raise rates, adding that it is more likely Powell's desire to meet expectations and keep people in suspense. More recent data may give the Fed the opportunity to abandon its current or long-term bias towards constant rate hikes.
Also, from Weyer's point of view, none of the economic data released this week stands out as a potential market-moving factor for gold. Rather, an unexpected headline or something arising from the situation between Israel and Gaza could shift the gold market.
James Stanley, senior market strategist at Forex.com, also expects price declines.
Darin Newsom, Senior Market Analyst at Barchart.com, said the technical picture suggests that gold may be oversold. But it's still too early to draw conclusions.
Ole Hansen, head of commodity strategy at Saxo Bank, also believes that gold prices could rise this week.
Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, is also bearish, believing that hawkish comments from Fed Chair Powell set the stage for higher-than-expected reports on inflation: consumer prices and producer prices in the United States. If inflation falls more slowly than expected or even rises, this could put upward pressure on Treasury yields and the U.S. dollar, acting as an obstacle for gold.
The latest survey was participated by 12 Wall Street analysts. Unlike the bullish sentiments of last week, only three analysts, or 25%, expect an increase in prices this week. Meanwhile, two-thirds, or 67%, predict a decline. And only one analyst, representing 8%, was neutral about gold.
A total of 319 votes were cast in the online poll. Despite participants being less optimistic than last week, overall optimism prevailed. 183 retail investors, or 57%, expect price increases, while 88, or 28%, voted for a decrease. Meanwhile, 48 people, or 15%, remained neutral.
The current week will liven up a bit on Tuesday with the release of the U.S. Consumer Price Index, followed by data on the U.S. Producer Price Index, retail sales, and the Empire State Manufacturing Survey on Wednesday.