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(Kitco News) – With US markets closed on Thursday and open half-day on Friday for the Thanksgiving long weekend, the gold market looks set to end the week quietly above $1,750 an ounce.
Gold and silver continue to benefit from shifting expectations that the US Federal Reserve will slow the pace of its aggressive rate hikes beginning next month, according to some analysts.
Futures markets are closed today but spot gold continues to trade with prices currently at $1,756.90 an ounce, up 0.39% on the day. The silver market is slightly weaker, last trading at $21.513 an ounce, down 0.23% on the day.
Although growing fears of a global recession continue to support gold prices, many analysts have said they do not expect any significant moves in the next two days leading up to the long weekend.
“With four World Cup games and three NFL games today, football results are likely to dominate the news more than corporate or economic events,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “Tomorrow, investors can check Black Friday mall traffic reports for insights into consumer holiday spending.”
Gold’s rally above $1,750 began Wednesday after the Federal Reserve signaled in minutes of its November monetary policy meeting that it would slow the pace of rate hikes from December. However, markets were already pricing in a 50 basis point move well ahead of the minutes.
“All things considered, it hasn’t been the busiest of weeks, but FOMC minutes have ensured that investors went into the Thanksgiving break on a bit of a high,” said Craig Erlam, senior market analyst for the UK and Europe at OANDA.
While gold prices are expected to end the week on solid footing, some analysts have noted that there is still a lack of bullish interest to push prices higher. Manish Jaradi, strategist at DailyFX, said in a note that while gold’s surge above $1,730 broke the month’s long downtrend, it has not yet generated enough momentum to break the $1,800 resistance.
“The near-term dynamic points to a far-reaching scenario. Given the heavy losses this year, it remains unclear whether this month’s recovery heralds a reversal (of the downtrend) or a corrective rally. In the context of a multi-week development picture, the trend remains down,” he said.
Ole Hansen, head of commodities strategy at Saxo Bank, said the gold market needs a new catalyst to break the initial resistance between $1,757 and $1,765.
“With no signs of a pick-up in demand for ETFs from longer-term investors yet, further extension will likely require further falls in yields and the US dollar or some other catalyst to safety,” he said.
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