The sudden collapse of gold last weekend brought attention to the precious metals market once again. And with inflation remaining high for now, some analysts and retail investors think it is time to buy the yellow metal.
In fact, a recent survey showed that short-term demand is upbeat again. However, careful observation is needed because the market is volatile amid the continued price recovery from the sudden fall.
15 Wall Street analysts took part in the survey, eight of which (62%) said gold will rise during this week. Three (23%) said they are expecting a decline in prices, while two (15%) have neutral assessments.
In an online poll, 57% (517 respondents) voted for a price increase, while 25% (233 people) voted for a decrease. The remaining 18% (164 people) were neutral about the price movement.
Before, retail investors had consistent bullish projections despite sentiment fluctuating sharply. But there were no bullish votes in the poll last week because gold slumped on Sunday night. Fortunately, price showed an impressive recovery before the new week started.
Senior analyst Jim Wyckoff said the rebound stabilized the market, and added that prices may trade sideways soon.
Meanwhile, Adrian Day said the plunge drew investor attention to gold and its role as a hedge against inflation.
But not all analysts are convinced that gold is poised to soar to new all-time highs. For example, David Madden of Equiti Capital said he is neutral about gold as the precious metal faces some critical new resistance levels, not to mention it has a bad reputation for resistance levels this year.
Christopher Vecchio of DailyFX is also not confident on steady growth, explaining that prior to the sell-off, gold was in ideal conditions, with real interest rates dropping to record lows. But metal prices still failed to rise despite the favorable factors.
He added that gold will continue to struggle, as the Federal Reserve is laying the groundwork for an early tapering.
