Gold Price Forecast: Analysts Predict Bullish Trend and Market Impact

For the second time in a row, gold set an all-time high at the weekly closing price, both on the spot and futures markets. This is despite the dovish tone of Fed Chairman Powell on interest rate policy and despite the fact thatRecord highs in equity markets and Bitcoin.

Analytical Predictions: A Bullish Perspective

The bullish sentiment has been Analysts prevailed. They see gold rising at least sideways or further in the coming weeks:

• Mark Leibovit, publisher of the VR Metals/Resource: summed up his stance on the precious metal's prospects in four letters: "BULL."
• "Sideways," says Christopher Vecchio, head of Futures & Forex at Tastylive.com. "Just buy in the dip until the trend changes, and there's no indication that gold's trend will change anytime soon."
• "Up," predicted Adrian Day, president of Adrian Day Asset Management. "Gold is due for a pause, but the momentum is with gold and new buyers – other than the central banks – are finally entering the market. Given the significant underexposure of most investors in the West, both private and institutional, this price jump could well continue."
• Ole Hansen, head of commodity strategy at Saxo Bank, was one of the few bearish voices among analysts this week. "Lower next week, because the metal needs consolidation now," he said.
• Sean Lusk, co-director at Walsh Trading, believes that all signs point to this rally being driven by government bond buying. "China is just quietly supporting the market and increasing reserves," he said. "A lot of bonds are being bought by the central banks, not only by them, but also by others to support their currencies. There are a lot of global uncertainties here, which is why stocks and gold are at record highs. You still have geopolitical tensions, but we've had geopolitical tensions for years," he added.  Lusk says that even with the yellow metal at these new levels, the trend remains upward. "The path of least resistance is still higher," he said. "Now we're above a resistance level and we're breaking some trend lines." 

Market Sentiment and Forecasts

This week, 14 analysts participated in the Kitco News Gold Survey, and optimism reigned on Wall Street. Six experts, or 43%, expected a higher level of Gold price, while an equal percentage predicted that the price of gold would trade sideways. Only two analysts, representing 14%, predicted a price decline for the precious metal.

Meanwhile, 296 votes were cast in Kitco's online polls, with a large majority of Main Street investors also predicting further gains for gold. 173 retailers, representing 58%, expected gold to rise next week. Another 67, or 23%, predicted it would be lower, while 56 respondents, or 19%, were neutral on the short-term outlook for the precious metal.

American Inflation data will once again take centre stage as February's  CPI and PPI reports are released on Tuesday and Thursday, respectively. Markets will also be paying attention to Thursday's retail sales report and weekly jobless claims, as well as Friday's output releases.

Central Banks and Physical Gold

Several analysts support the theory that the current rally is largely driven by the purchase of physical gold by Central Banks. "I think it's a clear driver in the market," said one analyst. "Obviously, the price action is attracting trend traders, right? People who are trend followers are attracted to this. So I think the central bank purchases have indeed been implemented, but the trend followers have increased the increase."

Future Risks and Opportunities

Looking ahead, several analysts consider the CPI and PPI Publications of next week as major risk events for gold traders. One analyst says, "It's definitely going to move the market in some way. The prospect of lower interest rates will give gold a boost, everyone is looking at this. Is it going to happen in June? Is it going to happen in September? When is it going to happen? When will the interest rate cuts come? That's what everyone is looking for."

Kitco Senior Analyst Jim Wyckoff sees only green light for the gold price next week. "Higher, because the technical numbers are completely bullish."