(Kitco News) – Gold is attracting new bullish attention after consolidating for two weeks and holding support around $2,300 an ounce. This renewed interest comes as the precious metal is looking to end the week near a two-week high, with June gold futures trading at $2,375.40 an ounce, up almost 3% from the previous week’s close.
Gold and Silver Performance
Silver has also shown strength, pushing back above $28 an ounce after holding critical support levels. May silver futures are currently trading at $28,310 an ounce, marking a solid 6% increase from last Friday.
Market Factors
Analysts attribute gold’s recent gains to fluid interest rate expectations, following disappointing economic data. A jump in weekly jobless claims and a decline in consumer sentiment suggest a weakening labor market and rising inflation expectations. This environment has led to speculation of a potential increase in U.S. rate cuts from one to two.
Despite these positive signals, some analysts caution that market expectations for rate cuts are subject to change. Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, believes that rallies in gold and silver could be short-lived due to uncertainties surrounding the Fed’s monetary policy.
Technical Analysis
Gold and silver’s technical outlook is also showing promise, according to Alex Kuptsikevich, Senior Market Analyst at FxPro. The momentum in both metals following key retracement levels suggests that the recent pullback was corrective in nature. However, Kuptsikevich notes that attracting new capital to drive prices to all-time highs will require further effort.
Outlook and Risks
Peter Granditch, Financial Analyst and market strategist, sees potential upside for gold and silver as interest rates peak amidst weakening economic activity. Despite risks of further consolidation, Granditch remains optimistic about the metals’ long-term prospects.
Upcoming Economic Data
Next week’s economic data, including the Consumer Price Index and U.S. retail sales figures, will be crucial in determining gold and silver’s trajectory. Analysts expect this data to provide insights into inflation trends and consumer spending behavior, which could impact market sentiment.
Overall, while gold and silver show promise, the path to reaching new highs may require overcoming challenges tied to economic uncertainties and market fluctuations.
Insight into Economic Fundamentals
Additional economic data to watch next week include:
- Tuesday: U.S. PPI, Federal Reserve Chair Jerome Powell’s speech in Amsterdam, Netherlands
- Wednesday: U.S. CPI, U.S. retail sales, New York Fed Empire State Survey
- Thursday: U.S. weekly jobless claims, U.S. building permits housing starts, Philadelphia Federal Reserve manufacturing survey
These economic indicators will provide valuable information on inflation, consumer spending, and overall economic health, influencing the direction of gold and silver prices in the near term.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes and is not a solicitation to make any exchange in commodities, securities, or other financial instruments. Kitco Metals Inc. and the author do not accept responsibility for losses and/or damages resulting from the use of this publication.
