Gold ended the week flat, closing at $1,291 per ounce, as it continued to find support at this level for the third time this year (see the blue line on the following chart).
The Trump administration has been putting pressure on the Federal Reserve to lower interest rates by as much as 50 basis points. Economic adviser Larry Kudlow said we are facing a worldwide slowdown as Europe is faltering. This is causing analysts to revamp predictions for gold prices—with some looking for a break above the previous high for this year (see red line on the previous chart), according to Kitco News:
“‘Gold set [to] rally towards our $1,360/oz target sooner-than-expected,’ TD Securities commodity strategists wrote in a note on Monday. ‘Given that the market is increasingly pricing in a U.S. rate cut this year, the U.S. dollar is on a weak footing and considering that equities are generally more worried about growth, gold could well move into a higher trading range sooner than expected.’
“TD Securities sees gold prices rising to $1,360 within three months and then moving towards $1,400 next year.”
Rick Andrews is president of Avant Capital Management