For the second week in a row, the price of gold lost its negative correlation with the US dollar, reaching another ATH for this year. During Friday`s trading session the price of gold reached the level of $2.329. The reason for such development could be summarized in a word uncertainty. First, there is uncertainty over the Fed rate cuts during the course of this year. Although the Fed is expecting to cut rates three times till the end of this year, considering latest inflation and job data, the markets are currently not at all sure that such a scenario will occur. They are currently expecting that the rates will stay higher for a longer period of time. Secondly, there are again geopolitical tensions in the Middle East, which impact the price of oil. The price of oil is one of the significant factors which might further impact inflation figures to grow. Thirdly, as news is reporting, central bankers are additionally boosting a demand for gold. The reason for this is currently not quite clear.
Since the beginning of March this year, the price of gold continues to move within highly overbought momentum. Moving average of 50 days continues to diverge from MA200 counterpart not indicating any kind of potential cross in the near future. As long as a high level of uncertainty holds on the market including geopolitical tensions, it could be expected that the price of gold will move to the higher grounds, in which sense, new ATH`s might be in store. A move to the lower grounds is possible, but only as a small correction of Friday's move.
Important news to watch during the week ahead are:
USD: Inflation rate for March, release of FOMC Minutes, PPI for March, Michigan consumer Sentiment preliminary for April.
Since the beginning of March this year, the price of gold continues to move within highly overbought momentum. Moving average of 50 days continues to diverge from MA200 counterpart not indicating any kind of potential cross in the near future. As long as a high level of uncertainty holds on the market including geopolitical tensions, it could be expected that the price of gold will move to the higher grounds, in which sense, new ATH`s might be in store. A move to the lower grounds is possible, but only as a small correction of Friday's move.
Important news to watch during the week ahead are:
USD: Inflation rate for March, release of FOMC Minutes, PPI for March, Michigan consumer Sentiment preliminary for April.
