The majority of Wall Street analysts anticipate that gold prices will continue to rise in the coming week.
According to Zhitong Finance, influenced by Iran’s announcement to open the Strait of Hormuz to all merchant ships, international gold and silver prices both closed higher on Friday, while crude oil prices and the US Dollar Index declined. Most Wall Street analysts expect gold prices to continue rising in the coming week.
Data shows that spot gold rose 0.92% to $4,834.05 per ounce on Friday, with a cumulative increase of 1.78% this week; COMEX gold futures rose 1.01% to $4,856.60 per ounce, with a cumulative weekly increase of 1.44%. Spot silver increased by 3.27% to $80.9822 per ounce, with a total increase of 6.74% this week; COMEX silver futures rose 3.09% to $81.720 per ounce, with a cumulative weekly rise of 6.04%.
Multiple analysts are bullish: Gold prices may return to $5,000
Peter Grant, senior metals strategist at Zaner Metals, stated, “The reopening of the Strait of Hormuz is a key turning point. Against the backdrop of pressured oil prices, this news is expected to alleviate inflation concerns and reignite market expectations for interest rate cuts, both of which are positive for gold.” He added that gold prices are likely to return above $5,000 in the short term.
Peter Cardillo, an analyst at Spartan Capital Securities, noted in his report that the resumption of navigation through the strait is particularly beneficial for silver, as its fundamentals already support strengthening. Rising industrial demand combined with a resurgence in safe-haven demand could jointly support silver prices. He also mentioned that if easing tensions in the Middle East drive the dollar lower and US Treasury yields down, gold prices still have room for further increases. A weak dollar and low-interest-rate environment significantly benefit gold, which is priced in dollars and offers no interest returns.
Marc Chandler, managing director at Bannockburn Global Forex, stated, “Gold prices are expected to continue rising in the coming week as the market gradually returns to its previous trading logic. The pressure from central banks selling gold may ease, while buying will persist. Resistance for gold prices lies near $5,000, with overall momentum indicators remaining positive. Currently, gold leans more toward being a risk asset rather than purely a safe-haven asset hedging against geopolitical conflicts or inflation.”
Adam Button, head of forex strategy at Forexlive.com, also focused on the movement of gold following the resumption of traffic through the Strait of Hormuz.
He stated, “Gold is a ‘peace trade,’ and the current market trend is confirming this. During the conflict phase, gold prices were significantly suppressed by two factors: First, deleveraging pressures caused overly crowded long positions in gold to face concentrated sell-offs; second, emerging markets collectively reduced their gold holdings. Emerging economies with large gold reserves and high dependence on oil imports generally saw their currencies under pressure, prompting these countries to sell gold to stabilize exchange rates or purchase oil to balance international payments.”
He further pointed out, “If oil prices remain at $150, emerging markets may face a currency crisis, forcing more countries to sell gold reserves to stabilize their currencies. Turkey has already taken such actions previously. However, this risk has now largely subsided.”
Button emphasized that emerging market countries still need to further increase their gold reserves to address potential crises. He stated, “Funds are continuously flowing into the gold market, and gold prices are moving towards $5,000.”
“Gold is no longer as feverishly pursued by the market as it was in January, when almost everyone was talking about it,” Barton added. “Kevin Warsh, the Federal Reserve Chair nominee, will attend a hearing on the 21st, an event worth focusing on. To ensure a smooth confirmation, he is highly likely to send dovish signals, and the market is also likely to believe this stance.”
“I think he will issue a dovish policy signal, and investors may consider going long on gold at that time.”
Beware of ‘Buy the Rumor, Sell the Fact’
However, the market is not unanimously bullish. Alex Kuptsikevich, Senior Market Analyst at FxPro, expects the gold price to retreat next week.
He stated: “The gold price is gradually recovering its losses and has approached the area near $4,900, where the 50-day moving average is located, which is a direct reaction to the easing of tensions in the Middle East.”
He also warned: “The market should beware of ‘buy the rumor, sell the fact’ dynamics. Although the upward trend in gold remains intact, upward momentum has slowed somewhat.”
“Next week, we need to focus on how gold performs near the 50-day moving average. If it effectively breaks through $4,900, there could be further upside potential toward $5,300 in the coming weeks; if it retreats from this level, which is our more inclined view, it may signal the end of this uptrend.”
Focus on U.S. Economic Data and Warsh’s Hearing
As tensions in the Middle East ease, market attention is expected to shift back to U.S. economic data, which could influence expectations regarding Federal Reserve policy and, in turn, affect the movement of precious metals.
The U.S. Senate confirmation hearing for Kevin Warsh as Federal Reserve Chair is scheduled for next Tuesday. The market widely anticipates that Warsh will release dovish monetary policy signals at that time, which could continue to provide support for gold prices.