DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold advanced this week as expectations for a September Federal Reserve rate increase faded, giving the precious metal fresh momentum after its August rebound. A stronger dollar, rising oil prices and bouts of profit taking created resistance, but buyers repeatedly returned.

Spot gold opened Sunday evening at $4,342.50 per ounce before climbing through Monday and Tuesday as traders prepared for United States inflation reports. The rally accelerated Wednesday after July consumer inflation largely matched forecasts, easing fears that policymakers would tighten monetary policy in September.

The metal reached a ten week high and set its weekly peak at $4,450.23 per ounce on Thursday. Sellers then emerged, locking in gains after four consecutive sessions of strength.

Gold fell sharply Thursday after softer wholesale inflation reduced immediate demand for inflation protection. Pressure continued into Friday as oil prices rose amid uncertainty surrounding the war with Iran, while Treasury yields also moved higher.

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Spot gold briefly touched a weekly low of $4,311.22 early Friday, but the retreat did not last. Retail sales unexpectedly declined 0.6%, strengthening the case for the Fed to leave rates unchanged at its September meeting and helping gold recover into the close.

The latest Kitco News Weekly Gold Survey revealed an emphatic bullish shift among professional analysts. Nine of ten Wall Street participants expected prices to rise during the coming week, while only one forecast a decline and none called for sideways trading.

Retail investors were nearly as optimistic. Of 222 Main Street respondents, 150, or 68%, expected gold to advance, while 38 predicted losses and 34 anticipated consolidation.

Adrian Day, president of Adrian Day Asset Management, expects measured gains rather than an immediate breakout. “The ongoing conflict between the prospects for higher rates on the one hand and weaker fiscal conditions on the other is keeping gold in a trading range, with very firm support on the downside, but not yet willing to rip higher.”

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Marc Chandler, managing director at Bannockburn Global Forex, sees a test of major technical resistance. “I like gold higher next week and look for a test on the 200 day moving average near $4503,” he said.

Rich Checkan, president and chief operating officer of Asset Strategies International, pointed to cooling inflation, weaker employment growth and rising jobless claims. “Gold has surged on this latest data, bouncing strongly off the consolidation lows near $4,000 per ounce,” he said. “The bias is clearly upward.”

Daniel Pavilonis, senior commodities broker at StoneX Group, remained more cautious, arguing that gold still lacks a decisive catalyst. “We need some kind of a driver here, and we're just not there yet,” he said.

Pavilonis believes investors can own precious metals without becoming excessively exposed. “I think you could be long metals, I think you could be long gold, but not overweight.”

The nation’s expanding debt burden remains a powerful argument for long term precious metals demand. Pavilonis noted that the 30 year Treasury yield had climbed above 5%, a warning that markets are demanding greater compensation as federal borrowing continues to swell.

Darin Newsom of Barchart.com also highlighted the reported $432 billion increase in the United States deficit during July. He argued that deteriorating fiscal credibility could weaken global confidence in the dollar and preserve long term buying interest in gold, although technical conditions could still produce a short term decline.

Adam Button, head of currency strategy at investingLive, said currency policy may be playing a larger role than recent inflation reports. “America has officially had a strong dollar policy forever, and they've abandoned it. They're actively weakening their currency. Americans are at war with the dollar.”

Button also cited persistent Treasury market concerns and the prospect of a roughly $2 trillion deficit. He said gold holding above $4,300 would improve confidence in near term support, though stronger seasonal demand may not arrive until November.

Investors will now focus on Wednesday’s release of minutes from the Fed’s July 28 and 29 meeting. The document could reveal how officials are balancing persistent inflation, slowing growth and disagreement over the appropriate course for interest rates.

Other scheduled reports include the New York Empire State Manufacturing Index, housing starts, building permits, pending home sales, weekly jobless claims and the Philadelphia Fed Manufacturing Index. Friday’s Flash S&P Global Composite PMI will provide an early reading on August business activity.

At the time of reporting, spot gold traded at $4,376.82 per ounce, gaining 0.84% for the week and 0.59% for the day. With professional sentiment nearly unanimous and retail investors firmly bullish, the market enters Fed minutes week with momentum, strong support and Washington’s debt problem still looming over the dollar.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.