‘The price of gold will continue rising to $2,074 per ounce, and it could reach $2,135 next week,” said PP Link Securities (PPLS) business manager Long Samnang.
Despite better than expected US employment data released on May 5 pushing gold down from the day’s high of $2,053.04 to a low of $1,999.59, the price of the yellow metal recovered well.
The three main US economic indicators for April were all better than the previous month, according to Forex Factory, with Average Hourly Earnings up 0.5 per cent, the Non-Farm Employment Change recording an additional 253,000 jobs, and the Unemployment Rate up 3.4 per cent, a 0.1 per cent improvement.
Furthermore, the US Federal Reserve on May 3 raised interest rates from five per cent to 5.25 per cent, also a factor that traditionally supports the value of the US dollar.
However, gold prices on Monday started bouncing back, reaching $2,037.53 on Tuesday, followed by a retraced price of around $2,032 on Wednesday.
Financial investment expert Samnang says the growth in US jobs and interest rate hikes were behind driving the appreciation of the greenback in the investment world.
But this could be a temporary situation, he adds, especially with the current global economic situation.
“The recent collapse of banks in the US, Switzerland and Germany – and uncertainty regarding other future possibilities that could lead to economic crises – have been supporting gold along the way.
“US dollar users have gained greater confidence in deciding to sell for profit in the hope interest rates will rise.
“And the protracted war between Russia and Ukraine is still affecting the world, especially the global economy,” Samnang said.
According to the aforementioned fundamentals, the price of gold could increase until breaking its historical high of 2,074.88 in August, 2020, he concludes.
For this week’s recommendation, Samnang says the safest point to buy is at $2,025 per ounce, and should investors have a large amount of capital, they could start buying at the current price, setting the stop-loss function at $2,000 per ounce and the take-profit at $2,050.