Wall Street turns bearish on gold; sees support at $1,900 as markets focus on ceasefire talks, Fed aggressive

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(Kitco News) – Potential progress in ceasefire talks between Russia and Ukraine could lower gold’s safe-haven premium next week, according to some market analysts who see further bearish momentum in the market.

The latest Kitco News weekly gold survey results show that most Wall Street analysts are now bearish on the precious metal. Meanwhile, while retail investors remain bullish on gold in the near term, sentiment has fallen sharply from the previous week.

While analysts expect gold prices to fall next week, many note that the market is stuck in a new consolidation pattern with initial support to hold between $1,880 and $1,900.

Sean Lusk, co-head of trade coverage at Walsh Trading, said that while gold is struggling to find new upside momentum, he still sees lower prices as a long-term buying opportunity.

“Who wants to be short of gold with everything that’s going on?” he said. “Investors should view any drop below $1,900 as a buying opportunity.”

This week, 18 Wall Street analysts participated in Kitco News’ gold poll. Among the participants, five analysts, or 28%, called for gold prices to rise next week. At the same time, ten analysts, or 56%, were bearish on gold in the short term, and three analysts, or 17%, were neutral on price.

Meanwhile, 604 votes were cast in an online Main Street poll. Of these, 336 respondents, or 56%, expected gold to rise next week. Another 170, or 28%, said less, while 98 voters, or 16%, were short-term neutral.




Confidence in gold has changed significantly compared to the previous week: 71% of analysts and 72% of retail investors expected to see higher prices last week. June gold futures look to end the week around $1,923 an ounce, down 1.8% from last week. The market has fallen below an important psychological level of $1,925 an ounce.

Adrian Day, chairman of Adrian Day Asset Management, said he is bearish on gold next week as its safe-haven premium disappears from the market. However, he added that the decline should be limited.

“Gold is not too far off its pre-war trend. Once the market focuses on the impossible choice of the Fed and ECB, gold will resume its uptrend,” he said.

Gold prices lost momentum last week after Russia and Ukraine began new peace talks in Istanbul, Turkey. Ukraine reportedly offered to adopt a neutral status in exchange for security guarantees. At the same time, Russia has reduced its military operations near Kyiv and Chernihiv to concentrate its forces in the Donbas region.




Coupled with the changing safe-haven sentiment, some analysts expect the Fed’s aggressive monetary policy stance could weigh on precious metals in the near term.

Marc Chandler, managing director of Bannockburn Global Forex, said markets would be keeping an eye on the minutes of the Federal Reserve’s March monetary policy meeting next week. And any aggressive tilt in the minutes could weigh on gold prices.

Chandler added that he could see gold testing support around $1,900 an ounce.



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has gone to great lengths to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage arising from the use of this publication.

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