Gold Price Stuck Around $1,800

The gold market hovers around $1,800 per ounce and might not go anywhere anytime soon as market sentiment among Wall Street traders and analysts remains neutral to bearish. Retail investors remain bullish on gold.

Gold prices are caught smack in the middle of opposing forces as the global economy faces rising inflation; however, those threat are being met with growing hawkish sentiment from central banks. Added to the mix is rising volatility in financial markets as central banks remove liquidity.

This week 17 Wall Street analysts participated in Kitco News’ gold survey. Among the participants, five, or 29%, called for gold prices to rise. In the same survey bearish and neutral votes each garnered six votes or 35%.

Meanwhile, 683 votes were cast in online Main Street polls. Of these, 385 respondents, or 56%, looked for gold to rise next week. Another 152, or 22%, said lower, while 146 voters, or 21%, were neutral in the near term.

The outlook on gold comes as prices end the week up 1% from last week’s sharp selloff following a hawkish outlook from the Federal Reserve and its leader Jerome Powell. April gold futures last traded at $1,807.10 an ounce.

Looking ahead, some analysts expect that gold prices will struggle as markets continue to price in more aggressive action from the U.S. central bank. Expectations continue to grow that the Federal Reserve could raise interest rates by 50 basis points in March as it kicks off a new tighten cycle.

Adding to those expectations is strong labor market data after the Bureau of Labor Statistics said 467,000 jobs were created in January. The data significantly beat expecations as some economists were looking for job losses.

The inflation threat also continues to grow with the report saying wages grew 0.7% last month and are up 5.7% in the last 12 months.

It seems that investors are focusing more on wage inflation keeping pressure on the central banks to raise interest rate. Gold investors should pay close attention to next week’s inflation data, to be released Thursday.

Because of the jobs data and rising wage inflation, the Federal Reserve is significantly behind the curve and will have to play catch up, which could weigh on gold prices in the near-term. Scotiabank lowers gold price forecast to $1,800 as Fed prepares to tighten monetary policy

There is no clear pattern on April gold’s daily chart. The contract could rocket to a test of its recent high of $1,856.70 or take out its recent low of $1,780.60, for no reason either way. Setting the ludicrous January jobs numbers (and December revisions) aside, the US dollar still looks to be in a short-term downtrend. If that holds, then gold could see some buying interest early next week.