Gold prices are set to rise next week, buoyed by the uncertainty in the financial markets following the Canadian and European central bank actions.
But the gold markets could witness some consolidation following a strong start to the year, analysts said.
Traders will be tracking the US Federal Reserve's monetary policy decision, due on 28 January, and its impact on the US dollar next week.
The demand for dollar-denominated commodities such as gold typically weakens on a stronger greenback as it makes the metal more expensive for holders of other currencies, lowering its hedge appeal.
Analysts' take
Capital Economics said it was bullish on gold heading into next week, stating that recent global central banks' moves had sparked some uncertainty in the financial markets.
The firm added that lower bond yields, and negative bond yields in Europe, will continue to support the gold market next week.
Howard Wen, commodity analyst from HSBC, told Kitco News that because of its strong momentum, gold prices do have room to climb higher, but that he expects the market to see a bit of consolidation after a rally in prices this year.
Ole Hansen, head of commodity strategy at Saxo Bank, told Kitco that the metal should maintain its momentum as long as it holds above the 200-day moving average, which comes in at $1,256.40 an ounce.
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But the gold markets could witness some consolidation following a strong start to the year, analysts said.
Traders will be tracking the US Federal Reserve's monetary policy decision, due on 28 January, and its impact on the US dollar next week.
The demand for dollar-denominated commodities such as gold typically weakens on a stronger greenback as it makes the metal more expensive for holders of other currencies, lowering its hedge appeal.
Analysts' take
Capital Economics said it was bullish on gold heading into next week, stating that recent global central banks' moves had sparked some uncertainty in the financial markets.
The firm added that lower bond yields, and negative bond yields in Europe, will continue to support the gold market next week.
Howard Wen, commodity analyst from HSBC, told Kitco News that because of its strong momentum, gold prices do have room to climb higher, but that he expects the market to see a bit of consolidation after a rally in prices this year.
Ole Hansen, head of commodity strategy at Saxo Bank, told Kitco that the metal should maintain its momentum as long as it holds above the 200-day moving average, which comes in at $1,256.40 an ounce.
Read more Click here / www.trade4x.net
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