FX.co ★ Short-term sentiment in gold market improves

The gold market may end the sixth month in a row with a decline. However, the sentiment is improving amid the mounting demand for safe-haven assets. According to the recent review, both analysts from Wall Street and retail investors from Main Street are optimistic about the precious metal's future.

They suppose that gold's attractiveness as a safe-haven asset in the global financial market has partially recovered. At the beginning of the previous week, the Bank of England had to intervene in the global bond market and buy long-term securities. The UK obligation started falling just after the government announced that it would spend about 300 billion pounds to support the economy.

The plan also led to a drop in the pound sterling to an all-time low against the US dollar. Analysts pinpointed that the BOE intervened in the bond market less than a week after the Bank of Japan had to support its currency for the first time since 1998.

Gold is falling against the Us dollar, but it remains at record highs against the Japanese yen, the British pound, and the euro. When panic sweeps across the market, gold becomes very attractive. This should boost the metal against the greenback.

Last week, 16 professionals participated in the poll organized by Wall Street. Ten analysts or 63% supposed that gold would be in the green in the following week. Meanwhile, three analysts, 19%, expected bearish sentiment, whereas another 3 analysts remained neutral. As for retail trading, 731 respondents took part in online surveys. A total of 389 voters, or 53%, called for an increase in gold. Another 225, or 31%, predicted a drop in gold. The remaining 117 voters, or 16%, favored a sideways market.

Bullish sentiment arises when gold prices end the week with a rise of 1%. This is only the second positive weekly close in the last eight weeks. According to Darin Newsom, President at Darin Newsom Analysis Inc., the price movement has created a key technical bullish reversal. He also added that there are signs that the US dollar would peak in the near future.