The topic of rising gold prices has definitely dominated recent days. Around midnight, new records were tested, this time at the level of around 2300 USD, which has already been symbolically exceeded. Meanwhile, in Polish zloty, prices are also climbing steadily, with dealers now asking over 9300 PLN for the most popular, 1-ounce coin. What might influence its future behavior in the near term? Comments from Tomasz Gessner, the chief analyst at Tavex.
It’s worth noting that we have observed increases in gold since mid-February, but in recent days, a new valuation record has been set daily. Although gold has very good prospects in the longer horizon, in the short term, the significant publicity surrounding its quotations could be a warning. As is well known, money likes silence. Therefore, those who missed the recent move might now be waiting for some correction, which there is now a bit of room for.
The behavior of this asset is influenced, among others, by the American central bank (Fed), which suggested the start of interest rate cuts later this year, and lower borrowing costs are usually favorable for the quotations of precious metals. Furthermore, beyond the perspective of rate cuts in the USA, additional support for gold prices comes from geopolitical tensions around the world and still significant gold purchases made by central banks.
In the context of upcoming events that have a good chance of providing even more volatility in gold, investors will learn about the monthly report from the US labor market tomorrow, which is definitely the most important publication of this week. The focus will be, as always, on the unemployment rate and the change in non-farm employment – points out Tomasz Gessner, the chief analyst at Tavex.
If the data were to disappoint, thereby increasing pressure for a faster cut in interest rates in the United States, gold would have the right to further accelerate its gains. Conversely, a situation would naturally occur in the case of data better than forecasts, which could then serve as a trigger for a correction in the metal’s price. The market consensus assumes that the unemployment rate in the USA remained unchanged in March, thus at the level of 3.9%.
