Trading | 4 months ago
Gold continues its impressive momentum as it advances to three months high. On Monday, gold price rose by 1.29% against the US dollar. After this jump, it can be seen on a weekly chart that the medium-term momentum has shifted in the favor of the bulls. The weaker U.S. dollar has supported this bullish momentum of gold.
Currently the gold is trading at $1869, which is an important resistance zone for gold. There are many minor resistance levels in this area. However, despite of these resistances, gold has gained more than 5% so far in this month. The pace of the gold rally was really impressive in the last week. This rally is expected to continue in this week as well. Gold has gained more than 1.5% so far in this week. While analyzing the weekly chart, we can see that gold is chasing the $1,900 Price level against massive resistance.
Gold is used as a hedge against the rising inflation. Increase in the consumer goods and services prices strengthen the demand for gold. Whenever the demand for any commodity increases, the price of that commodity also increases. Uncertainty in economy due to the COVID-19 strains and mutations in the Asia Pacific countries like India and Japan is also contributing to the rise of gold price.
The medium-term outlook for gold is bullish. The recent investment inflows into gold clearly signals a boost in investor sentiment. If we analyze the daily chart, we can see that the gold has formed a bullish channel. If gold is able to break the resistance at $1875 level, then we can see a good momentum towards the $2000 level. One must look for buying opportunities in gold after the confirmation of resistance breach.
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