Gold Price Posts Best Week in More than 2 Years, What’s Next?
The comments below are an edited and abridged synopsis of an article by Gold-Eagle
Gold is quickly becoming the asset to watch as inflation starts to slow and the crypto market goes through another meltdown phase. The precious metal was up more than $80 last week—its best weekly performance since July 2020.
The spot gold price began the week at $1,681 and ended at $1,765. This is the best performance since the week ended July 24, 2020, when gold rose more than $90 in the buildup to a record high above $2,000.
The turnaround came after US inflation data showed price pressures slowing. The biggest takeaway for the markets was a possibility of a more flexible Federal Reserve in the coming months. The news sent the US dollar lower, giving gold room to rally.
Analysts have been eyeing a gold comeback after seven consecutive months of losses, the longest losing streak in more than five decades. Gold moved on the combination of election headlines, hope that the Fed will slow things down, and China reopening.
The rally also coincided with another massive selloff in the crypto space, which saw Sam Bankman-Fried’s cryptocurrency exchange FTX filing for Chapter 11 bankruptcy. The event has a high-level contagion risk that will continue to affect the crypto space and the wider market in general.
Crypto volatility has a much broader reach this time around, which is why gold stands to benefit more than in the earlier months of this crypto winter.
Despite significant gains, analysts see room for gold to move even higher, with market strategist Frank Cholly highlighting $1,830 as a level that’s technically possible next week.