Forex Analysis & Reviews: Gold: A strong start to December created bullish sentiment
time 05.12.2022 01:22 PM
time Relevance up to, 08.12.2022 11:42 AM

This image is no longer relevant

A strong start to December, with week-end prices topping $1,800 and approaching their highest level in more than three months, created significant bullishness in the market; however, the question remains whether there will be enough sentiment to take investors out of the game.

This image is no longer relevant

The latest weekly gold survey shows that Wall Street analysts and Main Street retail investors are very optimistic about gold this week.

Gold's rally began on Wednesday when Federal Reserve Chairman Jerome Powell said it might be wise for the US central bank to slow down its monetary policy tightening in December.

At the same time, analysts say rising recession fears are providing renewed momentum for gold as a safe haven.

Colin Cieszynski, chief market strategist at SIA Wealth Management, said gold should remain optimistic even if rising interest rates continue to support the US dollar. According to him, investors are starting to realize that gold is still an important defensive asset.

Adam Button, head of currency strategy at Forexlive.com, said gold is benefiting from positive seasonal factors as demand picks up ahead of the holidays.

Last week, 18 Wall Street analysts took part in the gold survey. Among the participants, 12 people, or 67%, were bullish, and six analysts, or 33%, were bearish. There were no neutral votes in the survey.

In the Main Street online poll, 1,018 votes were cast. Of these, 715 respondents, or 70%, expected gold prices to rise this week. Another 188 voters, or 18%, said the price would go down, while 115 voters, or 11%, were neutral.

This image is no longer relevant

The optimistic forecast is due to the fact that gold prices rose by 2% at the end of the week. Even a stronger-than-expected November jobs report with strong wage growth was not enough to dampen gold's new momentum.

On Friday, the Bureau of Labor Statistics said 263,000 jobs were created in November; economists had expected 200,000 job gains. At the same time, wages increased by 5.1% YoY, well above expectations.

Darin Newsom, senior market analyst at Barchart, said the current week could be exciting for the precious metal as the current rally could be seen as a technical failure; however, he added that the momentum is clearly on the bullish side.

However, not all analysts are optimistic about gold, at least in the short term. Adrian Day, president of Adrian Day Asset Management, said that while bullish in the long term, he expects prices to fall this week.

Marc Chandler, managing director of Bannockburn Global Forex, said he is bearish on gold this week as markets are too optimistic about Powell's perceived dovish stance.

He added that the pay rise in the November jobs report shows that the Federal Reserve still has to deal with a growing inflation problem.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2023
Euro vs US Dollar
Select timeframe
Start trade
Start trade

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

  • Grand Choice
    Contest by
    InstaForex always strives to help you
    fulfill your biggest dreams.
  • Chancy Deposit
    Deposit your account with $3,000 and get $10000 more!
    In January we raffle $10000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
  • 30% Bonus
    Receive a 30% bonus every time you top up your account

Recommended Stories

ECB rates to peak longer than Fed rates, pushing EURUSD above 1.2

Forex is a place where questions never end. In the first phase of monetary tightening, investors worry about how quickly rates will rise. Then, how high they will grow. Finally

Marek Petkovich 15:10 2023-01-27 UTC+2

Does the US debt ceiling issue pose a threat to the world economy?

Additionally, US President Joe Biden blasted the Republicans, alleging that they want to use the debt ceiling as leverage in economic negotiations, as the markets were getting ready

Jakub Novak 12:11 2023-01-27 UTC+2

The euro has a good chance

According to a survey of analysts, the European Central Bank's decision to raise interest rates by 50 basis points is already final, so the euro has a high probability

Jakub Novak 12:01 2023-01-27 UTC+2

GBP/USD. Overview for January 27, 2023

On Thursday, the GBP/USD currency pair maintained its upward trend. If we consider the daytime, which is the period of greatest activity, the US dollar increased for little more than

Paolo Greco 11:47 2023-01-27 UTC+2

EUR/USD. Overview for January 27, 2023

The EUR/USD currency pair is gradually increasing. This is because nothing has changed over the last day, as we have stated. The present upward trend will not be interrupted even

Paolo Greco 11:35 2023-01-27 UTC+2

Economic growth in the US was strong at the end of 2022

The key takeaway from yesterday's Q4 GDP report was that economic growth in the US was strong at the end of 2022, thanks to the strong labor market and lower

Irina Yanina 11:25 2023-01-27 UTC+2

Soft landing of the US economy could boost markets, but pressure dollar

Mixed economic data from the US had caused a downturn in stock markets, but the situation leveled off later, allowing indices to crawl back up again. The reports indicated that

Pati Gani 10:08 2023-01-27 UTC+2

EUR/USD. U.S. GDP growth was better than expected, but the dollar reacted weakly to the report

The euro-dollar pair reacted erratically to the latest US GDP report. Initially, the price fell to the lower limit of the 1.0850-1.0950 range, then returned to the area

Irina Manzenko 22:52 2023-01-26 UTC+2

EURUSD: Can ECB push EUR higher?

If the market does not go in the direction it is expected to be seen, it is more likely to go in the opposite direction. Will this principle of technical

Marek Petkovich 17:39 2023-01-26 UTC+2

Fresh data on US inflation could determine the path of the Fed

Before the Fed holds its first committee meeting for this year, a report on core PCE will be released, which will definitely have an impact on the decisions the central

Irina Yanina 15:08 2023-01-26 UTC+2
Can't speak right now?
Ask your question in the chat.