Gold prices continue their ascent supported by expectations of dovish Federal Reserve signals and strong investor optimism, but analysts remain divided amid upcoming US economic data and potential technical reversals.
Gold prices extended their recent advance on 17 August, with spot bullion trading at 4,390.06 dollars an ounce in early Asia and December futures at 4,446.67 dollars, as softer expectations for a Federal Reserve rate increase in September continued to support the metal. The move added to August’s recovery, even as gold still faced intermittent pressure from a firmer dollar, higher oil prices and profit-taking.
The mood among market watchers remains broadly constructive. In the latest weekly sentiment surveys, nine of 10 analysts expected prices to rise, while 68% of retail investors also saw further gains ahead. Adrian Day, chairman of Adrian Day Asset Management, told the survey that he expects only a modest increase, arguing that gold is caught between the prospect of higher rates and weakening public finances. Marc Chandler, chief executive of Bannockburn Global Forex, was more upbeat, saying the metal could test its 200-day moving average near 4,503 dollars an ounce this week.
Not everyone is persuaded that the rebound has room to run. Darin Newsom, senior market analyst at Barchart.com, expects a decline, pointing to signs on the daily chart that the December contract could enter a short-term downtrend. Daniel Pavilonis, senior commodity broker at StoneX Group, said the two-week recovery is encouraging but not yet enough to confirm that the wider uptrend has returned, noting that the market still lacks a fresh catalyst to push through to new highs.
That debate will unfold against a busy US data calendar. Investors are due to watch New York’s Empire State manufacturing index, July housing starts and building permits, pending home sales, weekly jobless claims, the Philadelphia Fed’s manufacturing reading and, most importantly, the minutes from the Federal Open Market Committee’s 28-29 July meeting. Axios reported last week that gold had already climbed sharply after what it described as a dovish surprise from that meeting, while continued central bank buying, including a large Chinese purchase in July, has helped underpin the market. Economists also remain focused on still-elevated inflation and long-term Treasury yields, both of which have historically influenced bullion’s direction.
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