Gold Price Prediction – Gold Continues to Trend Higher as Dollar & Crypto Decline
|Gold Price Prediction – Gold Continues to Trend Higher as Dollar & Crypto Decline|
The gold price on Thursday (May 20) at $1,877.00, has ended the day below its highs around 0.4% up having travelled between a low of $1,863.95 and $1,883.98.
Global equities were stronger and there was stabilisation in crypto which sent the US dollar lower as yields sank as market fears of tapering have cooled upon deeper thought. The yield on the US 10-year note fell 3.8bps to 1.634%. Bitcoin had dropped more than 11% by 5 p.m. ET on Wednesday, after earlier plunging almost 30%.
''With investors sounding the alarm over inflation, institutional interest in the precious metals complex is likely to continue rising following months of outflows, providing an offsetting force against taper fears,'' analysts at TD Securities said.
"We have recently broken above the significant $1850 level, and that should kick off a bigger move, perhaps all the way to the $1950 level if we can continue to see resiliency. Pay attention to the US dollar, because if it continues to fall that could also have an effect on this market', Fxempire forecasts.
If the gold price do break down below the $1850 level, then we also need to take a look at the downtrend line that has been broken above in order to test for support again. If the gold price do break down below there, then we more than likely would go back and forth in the consolidation area between here and the 200 day EMA.
Breaking down below the 200 day EMA would then have this market selling this market. At that point, we would probably continue the overall negativity, but this would have to be accompanied by a spike in interest rates in the United States.
Looking ahead, attention is now focused on the preliminary US and eurozone May PMI data.
''We expect the service sector will lead gains in Europe, underpinned by the improved vaccination programme and gradual easing in restrictions in the euro area,'' analysts at ANZ Bank said.
'By contrast, the analysts said ''the PMI for the US is expected to ease slightly, implying growth momentum is in the euro’s favour at present.''
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Gold Market in India
Gold prices rose by Rs 357 to Rs 48,534 per 10 gram in the Mumbai (India) retail market on safe-haven demand, however, the appreciating rupee capped further gains. The precious metal traded higher due to crash in cryptocurrencies, dip in Treasury yields and dollar index.
Gold Market players will keep an eye on the US weekly jobless claims data scheduled later in the day.
The US dollar dropped below 90-mark at 89.98 or down 0.23 percent against a basket of six rival currencies. Spot gold was slightly lower by $0.61 to $1,869.01 an ounce at 12:20 GMT in London trading.
Forecast for gold price: Gold continues to trade in a range, hovering around three-month highs, as tapering talks from the US Federal Reserve bolstered the dollar and US yields, weighing on the metal. Minutes of the U.S. central bank's meeting said several policymakers thought if the U.S. economy continued rapid progress, it would be appropriate "at some point" to discuss tightening its accommodative policy”, Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services said.
In the futures market, the gold rate touched an intraday high of Rs 48,619 and an intraday low of Rs 48,269 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 44,108 and a high of Rs 51,924.
Gold futures for June delivery fell Rs 336, or 0.69 percent, to Rs 48,338 per 10 gram in evening trade on a business turnover of 6,213 lots. The same for August slipped Rs 399, or 0.81 percent, to Rs 48,800 on a business turnover of 8,446 lots.
The value of June and August’s contracts traded so far is Rs 1,650.58 crore and Rs 509.75 crore, respectively.
Similarly, Gold Mini contract for June edged lower by Rs 286, or 0.59 percent at Rs 48,374 on a business turnover of 12,062 lots.
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