Gold price climbed above $2,000 and continues to hold at these levels, on the expectation that the banking crisis in the US and Europe will force central banks to step back from rate hikes. Leading bank economists predict gold’s next move.
Gold price will move towards the upper part of this range
Gold broke above the recent short-term consolidation and April 2022 levels ($2,000), showing that the uptrend is continuing. Société Générale analysts say that breaking above the $2,055/2075 resistance zone will open the way to $2,150 and $2,230. In this context, analysts make the following assessment:
Gold is expected to gradually move towards the top of the $2,055/2.075 range since 2020. This is a key resistance zone. If gold breaks above this hurdle, it could mean the start of a larger uptrend towards the next projections of $2,150 and $2,230. $1,945, the lower end of the recent consolidation, will be an important support in the near term.
Does the price of gold tell us something about the Dollar?
cryptocoin.comAs you follow, it is noteworthy that gold has risen above $ 2,000. What does it mean for gold to go above $2,000? According to economists at ING, gold is seen as the flip side of the dollar trend and, of course, an important hedge against inflation. Based on this, economists make the following statement:
The rhetoric that a US banking crisis will undermine the Fed’s fight against high and entrenched inflation doesn’t seem to have much weight yet. And certainly gold as a noninterest bearing asset holds up well compared to the close to 5% rates available on overnight dollar deposits.
Another factor that works in favor of the gold price
According to economists, another factor working in favor of gold could be foreign exchange reserve management trends. Economists say the increasingly bipolar geopolitical world means that BRICS+ central banks will hold a larger portion of their international reserves. They detail it as follows:
This is a structural positive for gold and a structural negative for the dollar. And it will add to the cyclical negativity of the Fed’s easing action later this year. Markets will be watching closely this week’s U.S. jobs report and whether it will bring the gold market closer to its all-time high of $2,075.47 in August 2020.
Investors’ quest for security pushes gold to record high
Gold extended gains this week amid concerns over global economic activity. The yellow metal hit a record high, according to ANZ Bank economists. In this context, economists note:
US ADP employment data surprised the market, while the US March Services Index fell. This led to an escape to the safe haven, with the yield on two-year Treasuries falling at one stage by 18 basis points. However, the US dollar also appreciated, which reduced gold’s appeal to investors. Still, gold continues to hit record highs as investors seek security amid high inflation.
Credit Suisse expects major resistance to be tested below
The bright metal benefited strongly from the drop in yields and the decline in the dollar. Credit Suisse economists are waiting for the key resistance at $2,070/75 to be tested. In this direction, economists draw attention to the following levels:
We expect a retest of the long-term resistance at $2,070/75, the record highs of 2020 and 2022. While this should clearly be respected, a clear and sustained break would signal a major bullish long-term breakout to open the door to the next move to $2,300. Ideally, the 55-DMA currently seen at $1,898 currently supports the market. If this is broken, the risk of a break above $2,070/75 will decrease. Also, in a wider range, it would point to a lower reversal with the next support at $1,778.
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