Gold futures markets saw a reversal in open interest on Friday, with nearly 10K contracts shrinking. This follows five consecutive days of builds and was accompanied by a decrease in volume as well. Despite this short-term pullback, analysts are still predicting further upside near term for gold futures prices.
The precious metal has been on an upward trajectory since the start of the year due to its haven status amid global economic uncertainty caused by COVID-19 and rising geopolitical tensions between China and the US. Gold is seen as an attractive investment option during times of volatility because it tends to hold its value better than other assets, such as stocks or bonds.
Analysts believe that gold will continue to be supported near term by factors, such as central bank stimulus measures, low-interest rates around the world, increased demand from investors seeking safety from riskier investments, and potential currency devaluation due to inflationary pressures created by large government deficits resulting from fiscal stimulus packages designed to combat COVID-19 related economic downturns globally.
Overall, sentiment remains bullish for gold despite some short-term fluctuations in open interest levels; however, investors should remain mindful that any sudden changes could lead to sharp price movements either way depending on market conditions at any given time.
Read more at FXStreet
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