(Kitco News) – According to some analysts, next week will be an important test for the gold market as a hawkish Fed could put downward pressure on a market that is already sensitive following Monday’s blow-off top.
After hitting a record high around $2,150 an ounce at the start of the week, gold prices are heading into the weekend down more than 3%, testing critical support just above $2,010 an ounce. With a $141 swing this week, the gold market saw the most volatility since mid-August 2020, just after gold established its previous record high.
Ole Hansen, head of commodity strategy at Saxo Bank, said that Monday’s rally and subsequent selloff was not helpful for gold’s long-term price action.”Technically, gold has a lot of work to do to make up for the damage that was done,” he said.
Along with overbought momentum, Hansen said the gold market has run too far ahead regarding potential rate cuts in 2024, which could keep prices below $2,050 an ounce in the near term.
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