Bullish sentiment in gold increases, but focus remains on rising effects

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(Kitco News) – Sentiment continues to improve in the gold market among Wall Street analysts and Main Street investors. However, there are concerns that rising yields will hamper gold in the short term at a critical resistance of less than $ 1,750.

“Gold has had a good bounce from its recent lows, but it can only be a short-term correction, as prices appear to be limited, as inflation is still not a major story for investors,” said Colin Cieszynski, SIA chief market strategist. , said. Wealth management.

Although Cieszynski is clumsy about gold in the short term, he added that gold has room to move higher in this affirmative action refusal.

This week, 13 analysts took part in the survey. A total of 6 voters, or 46%, called for gold prices to rise next week. Meanwhile, four voters, or 31%, said they saw gold prices fall next week. Three analysts, or 23%, saw prices move sideways.

Both sentiment and participation in the weekly gold survey improved among retail investors. This week, 1698 votes were cast in online surveys. Among them, 1,101, or 65%, said they were positive about gold next week. Another 355 participants, or 21%, said they were clumsy, while 242 voters, or 14%, were neutral about the precious metal.

The increase in positive sentiment comes as a result of the gold market this week with a modest profit but below a week high. Gold futures in June last traded at $ 1,740 per ounce, up 1% from last Friday.

The gold market made a brief push to $ 1,750 per ounce this week after the Federal Reserve left its ultra-loose monetary policy unchanged. The central bank has also indicated that it will not raise interest rates until at least 2024.

Although the Federal Reserve is expected to remain extremely patient as the US economy recovers, the gold market still has to deal with rising bond yields. Jerome Powell, chairman of the Federal Reserve, said he was not worried about the recent sell-off in the bond market, which raised yields to a 13-month high above 1.7%.

For many investors, higher returns, which also support the US dollar, are the biggest challenge for the gold market. However, the positive movements of gold this week may indicate that the bond market has less influence on the precious metal.

Adrian Day, president of Adrian Day Asset Management, said he has a positive outlook on gold as bond yields may be close.

‘The mortgage guards may not have been defeated by Fed Chairman Jerome Powell’s claims that the Fed would stay easy, but eventually the Fed will stop the rise in long returns through more words or through action, and that will be positive for gold. , “he said.

Sean Lusk, co-director of commercial hedging at Walsh Trading, said he was also looking for bond yields to find a natural ceiling as the US Federal Reserve expects to keep interest rates at zero levels for the next three years .

However, Lusk added that it is a bit too early to get excited about gold as the market is still strong.

“With interest rates at zero, the yield on bonds can go just as high,” he said. “But I want to see gold hold at least $ 1,740 and see some weakness in the U.S. dollar before I get excited about gold.”

Ole Hansen, head of commodity strategy at Saxo Bank, said he was also neutral on gold in the short term, but wanted to see a break of more than $ 1,765 per ounce before becoming bearish.

He added that gold was “trying to restore its reflection evidence, something that has been sorely lacking for the past four months.”