Gold Prices: What To Watch For In The Coming Weeks

Friday, May 5, 2017

gold prices chart

As of Thursday morning, the prospects of the gold price were not looking good: it’s down to about $1,225-$1,230 per troy ounce. In what has been a tough day for commodities, oil is also down to a new, recent low that goes back several months. But whether or not these dire prices will hold might not be up to the commodities markets, but the economic news at large—and there are some potentially dicey headlines on the horizon that all investors, not just precious metals investors, will want to pay attention to.

Total Global Demand For Gold Down Compared To 2016

Before forecasting where gold may head, let’s take a look at how we ended up here. It’s been no secret that gold demand has been slowing, which may be partially to blame for lower prices and gold’s struggle to break out of the $1,200 range. Now it appears that total gold investment demand is down compared to last year, which shouldn’t be a surprise. But now that we’ve seen the report, it serves as another headline to explain how gold prices ended up at this point—and may even effect the outlook in the future as investors look for a proper hedge against the stock market.

Watching The Upcoming Jobs Report

In order to forecast where gold may go, we would have to know what the headlines will be—including immediately upcoming headlines such as Friday’s jobs report. It’s anybody’s guess as to what this report might contain, but many investors see it as a potential “turning point.” This is especially true for bonds, which many investors have been watching recently as gold’s price continues to dip. One might even consider the bond market the first hedge that many investors turn to when they don’t trust stocks to perform well.

According to the CNBC report, the jobs report is expected to be in the 175,000-185,000 range—so watching for an underperformance of this number should give you an explanation if the Dow Jones Industrial Average dips suddenly tomorrow and gold prices rebound.

Federal Reserve Giving Little Indication On Next Move

There is little to no speculation that the Federal Reserve will cut interest rates, of course, but whether or not the Fed will stay put or raise them again in June is still up in the air. As many gold investors know, the Federal Reserve interest rate targets are some of the most important variables out there, which is why investors seem to hold their breath every time the Fed makes an announcement.

For the short-term gold forecast, we’re watching economic news like Friday’s jobs report and, of course, the movement of the Federal Reserve. On a longer-term basis, it’s much more difficult to predict where gold prices will end up. The summer of 2016 was big for gold markets after Brexit, but it’s entirely possible there will be no such surprise in the headlines in the summer of 2017. But as any investor with experience will tell you, there are never any guarantees. 

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Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at dcapriotti@gold-eagle.com.