Gold price may decrease in the first week of the Year of the Tiger

 Gold price may decrease in the first week of the Year of the Tiger

The Fed's early push to raise interest rates has woken up the bears in the gold market and raised concerns among analysts about the possibility of a market correction.

The cautious sentiment of Wall Street analysts comes as gold prices have fallen nearly 3% last week since the US Federal Reserve's (Fed) monetary policy meeting, setting the stage for a move in the future. interest rate hike in March.

This week, of 14 Wall Street analysts who participated in Kitco's gold survey, only 4 (29%) forecast gold prices to rise. 50% of the experts surveyed think the precious metal will fall, while three analysts forecast the market to be flat.

Meanwhile, 55% of the total of nearly 500 retail investors surveyed forecast that the gold price will regain the green color, 32% forecast the precious metal's price will drop to 14%, keeping a neutral view. While retail investors remain bullish on gold, the number of participants in the weekly survey fell to its lowest level since September.

Kitco's survey results forecast the weekly gold price trend from January 31 to February 4. Photo: Kitco

Kitco's survey results forecast the weekly gold price trend from January 31 to February 4. Photo: Kitco

According to some analysts, there is a possibility of gold price decline in the short term with new support at $1,750 per ounce. However, others noted that the market is oversold and could bounce back in the near term.

"Gold could go lower, but I'm still buying because the Fed seems to be tightening too much and they're going to have to turn around," said Phillip Streible, chief market strategist at Blue Line Futures.

Adrian Day, president of Adrian Day Asset Management, is neutral on gold in the near term but looks for support in the precious metal.

“The basic argument is that at some point the Fed will drop its anti-inflation stance and gold will come back,” said Adrian Day. "They may not retreat immediately, but when faced with a choice between a slowing economy, tight liquidity, a sliding market, or inflation and the dollar, they will accept inflation." broadcast".

Colin Cieszynski, chief market strategist at SIA Wealth Management, holds the opposite view. This expert believes that gold prices may continue in a downtrend in the near future due to rapid inflation, which may further support the "hawkish" view of the Fed.