(Kitco News) - Next week is chock-full of possible market-moving events for the gold market, with a Federal Reserve monetary policy meeting and April nonfarm payrolls data set for release; additionally, any change in the standoff between Russia and Ukraine has the ability to move markets.
Gold traders will have to be nimble next week as these headline-making events could cause volatile market action.
June gold futures rose Friday, settling at $1,300.80 an ounce on the Comex division of the New York Mercantile Exchange, up 0.53% on the week. May silver fell Friday, settling at $19.691 an ounce, up 0.49% on the week.
In the Kitco News Gold Survey, out of 33 participants, 19 responded this week. Twelve see prices up, while four see prices down and three see prices sideways or unchanged.
Gold prices popped higher Thursday, reversing the downtrend seen earlier in the week, as traders became nervous over perceived escalation in the Ukraine-Russian situation. President Barack Obama and European leaders are set to meet and Obama is expected to try to convince EU leaders to put sanctions on Russia for its saber-rattling toward Ukraine.
Any increase in tensions between the two nations could cause investors to sour on risky assets like equities, such as what was seen in Thursday’s trade, and that may be supportive to gold. Standard & Poor’s lowered its credit rating on Russia to BBB-, near junk status, and the Russian stock index fell about 5% this week over the continued geopolitical tensions, said BNP Paribas.
Because of the uncertainty over the Ukraine situation, several gold-market watchers said they are leaning toward higher prices for next week.
“Fundamentally, the situation in Ukraine could ratchet up (and that would support gold). You’re seeing it in other markets, too. Look at the grains. You’re not seeing it in energy, though, because crude oil is lower. But I wouldn’t sell crude oil here,” said Charlie Nedoss, senior market strategist at LaSalle Futures Group.
Nedoss said gold’s technical charts also look positive going into next week, especially since gold closed the week higher.
“This was a big week. We tried and failed three times to hold under the 100-day moving average,” Nedoss said.
If gold can build on weekly gains and close above $1,320, “that would be very friendly to gold,” he said.
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