Gold forecast 2021: XAU / USD bulls attack $ 1875- $ 76 hurdle amid weak US dollar
Update: Gold prices remain at the forefront near the four-month high, up 0.20% around $ 1,871 as European traders brace for Tuesday’s bell. Gold buyers initially applauded a surge in US Treasury yields to refresh the multi-day high before recently respecting the decline in the US dollar. It should be noted, however, that the greenback bears are waiting for further indices and therefore the gold surge stops around the key resistance including the late January highs. Behind those moves could be mixed signals from the Fed and US data, as well as optimism about the coronavirus (COVID-19) vaccine. Moreover, a sense of caution ahead of Wednesday’s FOMC could also probe the gold bulls going forward.
The price of gold is off highs and slipping below $ 1,870 amid a rebound in Treasury yields across the curve, helping to cap the decline in the US dollar. The price of gold has refreshed its three-month highs to $ 1,874 in the past hour, as the greenback continues to remain undermined by expectations that the Fed will keep interest rates lower for a while. longer period, especially after the weaker US retail sales report tamed upside fears. inflation.
In addition, gold received an extra boost after Dallas Fed Chairman Robert Kaplan on Monday reiterated his view that he did not expect a rate hike before the year. next. Meanwhile, rising covid cases in Asia and escalating tensions in the Middle East keep the momentum around traditional gold as a safe haven intact.
Read: Gold is on the rise again, but can prices exceed 1900? [Video]
Lily: Gold forecast: XAU / USD bulls eye $ 1,850 after regaining control
At the time of writing this article, the price of gold is trading a little higher in Asia by around 0.13% in XAU / USD.
XAU / USD rose 1.26% to $ 1,868.50 on Monday and added a dollar to hit a new cycle high of $ 1,869.71 on a cautious start to the week for global financial markets.
Overnight, global equities came under pressure as bond yields edged higher, leading to a Goldilocks scenario for gold as markets worried about US inflation after the beating of last week’s CPI.
Meanwhile, Federal Reserve Vice Chairman Richard Clarida has said the Fed will respond to higher inflation if necessary, but he and others, including Fed Chairman Jerome Powell, have consistently insisted that now is not the time to start talking about reduction while in employment. stay deep in a hole.
We will see the minutes of the Federal Reserve policy meeting on Wednesday last month.
Investors will be on the lookout for more meat on the bone in policymakers’ prospects of an economic rebound and for clues regarding their thinking about spikes in inflation and the ongoing economic recovery.
Fund managers increased the net length
Meanwhile, analysts at TD Securities explained that fund managers ultimately increased their net length as the disappointing non-farm print catalyzed a series of algorithmic short hedges, helping prices move north of the range. of $ 1800 / oz.
At the same time, we noted that the composition of gold flows is changing, pointing out that discretionary capital could once again move towards gold, but the rise in ETF flows alongside positioning of fund managers has since reinforced this view – especially as the “fleeting” debate around inflation takes its part in mind.
Pick your poison, but the most plausible scenarios should all see gold prices eventually strengthen. ”
Gold forecast – Technical analysis
According to the previous analysis, Chart of the Week: Gold as it approaches $ 1,855, the price of gold added to Friday’s bullish close.
Preliminary analysis, daily chart
“From a daily standpoint, the bulls are taking previous highs and closed Friday’s session with a strong offer.
A run into the psychological $ 1,850 is on the charts with a -272% Fibo retracement of the previous correction to $ 1,855.
Live market, daily chart
Meanwhile, the -272% Fibo retracements of the previous correction at $ 1,855 were easily erased.
In fact, we saw a perfect touch of -61.8% Fibo at the day’s highs.
A correction is the most likely scenario at this point revealing a 38.2% Fibonacci retracement level for the next few sessions at $ 1,845.
Looking at longer term timeframes, this also takes into account the market structure on the monthly chart as follows:
While an upside pursuit is always possible, the monthly supply area could be a tough issue for the bulls to crack immediately.
Weekly Gold Forecast: XAU / USD Bulls Eyeing $ 1,850 After Regaining Control
Gold forecast 2021 May 18: XAU / USD to test $ 1900 amid data disappointments – TDS
The price of gold hovered around $ 1,870, prolonging its rally. The yellow metal tends to outperform when economic data weakens, and underperform when the economic outlook improves. Now that there have been many disappointments with the data, forecasters are likely to extend the projections even lower. Subsequently, Bart Melek, Head of Commodity Strategy, estimates that XAU / USD is likely to move closer to the $ 1,900 level.
Data wait cycle and gold are so happy together
“As the data begins to tread down again and the market enters the corrective part of the data cycle, yields should be held lower and the USD may be under pressure.”
Read more: XAU / USD to test $ 1900 amid data disappointments – TDS