The precious metals commodity market is showing positive signals with projections of a continued upward trend in global gold prices in the coming week. The primary sentiment driving this optimism is the growing market expectation of monetary easing policies by the US central bank, the Federal Reserve (the Fed).
The Director of Traze Andalan Futures, Ibrahim Assuaibi, explained that gold price movements will still be heavily influenced by three main pillars: geopolitical dynamics in the Middle East, US monetary policy, and massive buying by global central banks. Technically, gold is projected to test resistance levels in the range of US$4,248 to US$4,348 per troy ounce in the short term.
One crucial variable supporting this scenario is the downward trend in global crude oil prices. Stability in oil prices is believed to be able to curb inflationary pressures in the United States. If the inflation rate successfully falls toward the 2% target, the room for the Fed to initiate a cycle of interest rate cuts will widen. In the history of financial markets, low interest rate policies often trigger an increase in the value of safe-haven assets like gold.
In addition to monetary policy factors, the consistent gold-buying spree by various central banks around the world also provides a solid foundation for prices. This move maintains the balance of demand in the global market and provides fundamental support for the asset's value.
Looking at the combination of potential US rate cuts and high institutional demand, analysts see that gold still has ample room for appreciation until the end of 2026. In fact, an optimistic scenario suggests that global gold prices have the potential to break the psychological threshold of US$5,000 per troy ounce if market conditions remain supportive.
