the price of gold is slowly picking up the colors

TOPICS IN THIS GOLD ANALYSIS

  • Gold prices supported by inflation fears
  • Gold: noe consolidation in a triangle

Gold prices supported by inflation fears

Gold prices rose this week to their highest level in two months. The modest rise in bullion comes as the US dollar rallied and Treasury yields retreated after a sharp rise, helping to heighten investor interest in the precious metal.

The recent rise in bond yields had helped reduce appetite for precious metals, which compete with government debt as a safe haven but do not offer a coupon to buyers. However, yields eased a little to reach 1.74% on Friday (US 10-year rate).

The prospect of a series of interest rate hikes by the US Federal Reserve had a negative effect on gold, as higher rates caused the attraction of non-performing gold and silver. The FOMC, which sets the rates, is due to go on January 25 and 26.

Gold has often been used as a hedge against inflation. As such, the yellow metal’s recent rise comes in a market environment where investors believe central banks are not doing enough to reduce price pressures.

Gold: a consolidation in a triangle

The price of gold regained attractiveness in the eyes of investors in recent sessions. The breakout of $1,830 is a first bullish technical signal. The market is therefore well oriented to rally the next level towards 1,850 dollars.

In the medium term, it is clear that Gold is moving inside a symmetrical triangle. Thus, crossing the boundary would lead to a strong bullish recovery.

In 2022, precious metals could return to center stage, an opportunity to shine again after a fairly lackluster 2021 (-3.74% for Gold).

Consequently, we estimate that the ounce of gold has the wind in its sails to start again with renewed vigor and promote a new upward wave towards 1,910 dollars then 1,960 dollars.

CHART DU GOLD IN DATA WEEKS

Twitter @Joris Zanna

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