Gold Price Forecast: Gold gained traction for the third consecutive session and shot to over three-month tops, around the $1,855 region during the early part of the trading action on Monday. The uptick was sponsored by a combination of factors, though slightly overbought conditions on intraday charts held bulls from placing aggressive bets.
Gold Price Forecast
The US dollar struggled to capitalize on its modest uptick, instead met with some fresh supply at higher levels amid dovish Fed expectations. Friday’s disappointing US Retail Sales figures reinforced market expectations that the Fed will keep interest rates low for a longer period and extended some support to gold.
The USD was further pressured by the ongoing decline in the US Treasury bond yields, which was seen as another factor that acted as a tailwind for the non-yielding yellow metal. Apart from this, a softer risk tone – amid worries about the continuous surge in new COVID-19 cases in Asia – provided an additional boost to traditional safe-haven assets, including gold.
The momentum pushed spot prices beyond the very important 200-day SMA for the first time since early February and might have already set the stage for additional gains. Hence, a subsequent move beyond the $1,863-65 intermediate resistance, en-route the $1,875-76 supply zone, now looks a distinct possibility.
Gold price forecast has finally cracked the 200-DMA barrier at $1846 to clinch fresh three-month tops at $1853, starting out a fresh week this Monday. The gold price extends the bullish momentum into the third straight session, shrugging off the latest bounce in the US dollar across its main competitors. Concerns over uneven economic recovery in China help underpin the sentiment around gold.
Gold Price Forecast Today
The recent strength in the gold price can be mainly attributed to the resurgent dovish Fed expectations, in light of the downbeat US Retail Sales data released last Friday. Dismal US data tamed rising inflation fears, weighing heavily on the Treasury yields, aiding the non-yielding gold. Gold traders now look forward to the FOMC minutes due for release on Wednesday for fresh direction. In the meantime, the broader market sentiment and Fedspeak will continue to influence gold prices.
Gold price defies the early Asian pullback from February high, recently taking the bids to $1,848, up 0.18% intraday, during Monday. In doing so, the gold buyers benefit from the US dollar pullback while also cheering the risk-on mood portrayed on Friday.
The US dollar index (DXY) jumped 10 pips before easing to $90.39 of late. The greenback gauge might have initially cheered a lack of major data/events and the geopolitical unrest in the Middle East. However, the mixed plays between the US reflation concerns and the Fed’s defense to easy money policy seem to propel the gold prices.
Moving on, China’s data dump will be the key as strong numbers from the world’s largest industrial player could renew the inflation woes and tame the gold buyers. Though, US catalysts and the Fedspeak gain a higher weight than China data when it comes to gold.