20.03.202314:43 Forex Analysis & Reviews: Is the gold market overbought?

Gold prices could rise this week as bullish sentiment grows among retail investors seeking to protect themselves from a major banking crisis like 2008. Nevertheless, Wall Street analysts take a more conservative position in the short term.

At this point in time, the precious metal is posting its best weekly gain since March 2020.

According to the latest gold survey, sentiment among Main Street investors rose to a three-month high. However, Wall Street analyst sentiment is more varied, with bullish sentiment holding only a slight edge while the rest are left out.

As the growing turmoil in the financial markets will force the Federal Reserve to end its aggressive year-long tightening cycle at the next meeting, many analysts are optimistic about gold. Although many believe the market is overbought and gold is on the verge of a new all-time high.

Last Friday, 22 analysts took part in the Wall Street gold survey. Nine of them, or 41%, were optimistic about the current week. Five analysts, or 23%, are on the bear side. And eight analysts, or 36%, were neutral.

On Main Street, 707 votes were cast in an online poll. Of these, 445 respondents, or 63%, expected gold prices to rise. Another 169 voters, or 24%, said the price would go down. And 93 voters, or 13%, were neutral.

The bullish outlook on Main Street comes as the precious metal rose more than 5% last week, posting its best weekly gain in three years.

The survey showed that, on average, retail investors expect prices at $1,922 per ounce by the end of the week:

However, looking at the details of the results, less than a third of respondents believe that gold prices will fall below $1,900 an ounce:

Wall Street analysts are much more optimistic. They are expecting stable prices of $2,000 an ounce this week.

Gold will also be sensitive to improved market sentiment if government regulators manage to contain the crisis.