Gold (XAU/USD) has drawn a double top at $2,477 per ounce this Friday, August 2, slightly below its $2,483 all-time high (ATH) from July 17. The movement came as recession fears rose in the United States, and analysts now show a bullish bias toward gold.
Nonfarm payrolls and unemployment rate data reported on Friday have sent waves to the finance markets, fueling recession fears.
Essentially, job growth in July was 114,000, far below June’s downwardly revised data and Dow Jones expectations of 179,000 and 185,000, respectively. The unemployment rate came at 4.3%, also worse than expected and the highest rate since October 21.
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While the commodity is usually seen as a hedge against economic crises, gold saw a significant sell-off following the news. Analysts, however, believe it was a natural risk-off reaction, and the precious metal is now ready to break its ATH.
In summary, gold closed Friday trading at $2,442, with 3.78% gains from the local bottom on July 25. Interestingly, the retracement to $2,353 respected the 50-day exponential moving average (1D 50EMA) resistance, making ground for a bounce.
Analysts weigh in on gold amid recession fears
In this context, retail investors and prominent analysts responded to the Kitco News Weekly Gold Survey, showing a bullish bias.
The survey talked to Adrian Day, President of Adrian Day Asset Management; Marc Chandler, Managing Director at Bannockburn Global Forex; Michele Schneider, Chief Strategist at MarketGauge.com; Bob Haberkorn, Senior Commodities Broker at RJO Futures; Christopher Vecchio, head of futures strategies and forex at Tastylive.com; James Stanley, senior market strategist at Forex.com; and Adam Button, head of currency strategy at Forexlive.com.
Notably, Adrian Day expects gold to push higher as the U.S. economy weakens. Marc Chandler sees gold challenging last month’s record high. Meanwhile, Michele Schneider believes gold needs to hold $2,450 to remain bullish.
Haberkorn views the recent selloff as an opportunity to buy gold, an opinion shared by Vecchio, who advises buying dips. James Stanley also believes bulls remain in control.
Nevertheless, Adam Button cautions against rushing to buy gold now but likes its prospects for the fall. Meanwhile, the survey shows 79% of Wall Street analysts expect gold prices to rise next week. Main Street investors are similarly bullish, with 73% anticipating higher gold prices in the coming week.
Analysts cite recession fears, a weakening U.S. economy, and geopolitical tensions as factors supporting gold’s upward trajectory. The market will closely watch upcoming economic indicators and Treasury auctions for further direction.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
