Gold Price Analysis – May 6th, 2021

Trading | 5 months ago


Gold Price Analysis – May 6th, 2021 - tradeglobalmarket

Gold spot (XAU/USD) ended higher on yesterday's trading session. Currently the gold is trading at $1786, and it is fluctuating around $1800 price level from last 21 days. The $1800 price level is a very strong resistance level for gold.

XAUUSD - Gold Price Analysis

Hedge funds and bullish investors have to make another attempt at cracking the $1800 price level. Although the demand for gold in major markets remained limited, gold is showing a mild bullish momentum. In this week gold touched the $1800 price level, by rising 0.76% against the US dollar. US Economy and bond yields are inversely correlated to gold. So, if economy is improving, gold will lose value. Surprisingly, the gold price went against the expectations of many analysts.

Higher bond yields make gold less alluring or valuable to investors. A heavy market correction in stocks is expected in coming weeks. When this happens, gold may reach $2000 price level. In the last month alone, gold spot price rose by 3.78%. It had created a low of $1705 and high of $1797. Gold also acts as a hedge against the rising inflation. Since the worldwide economies are reopening after the pandemic, inflation may rise slowly in the coming weeks or months.

The long-term technical outlook for gold is bullish. The long-term uptrend is now in place for gold, as it can be seen easily on the weekly chart. If gold is able to break above the $1800 price level, then One must look for buying opportunities in gold as it may reach $1950 in this month.


 

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