XAU/USD Forecast: Gold Prices Rebound as COVID-19 Fears Take Hold

xau usd forecast gold prices rebound as covid 19 fears take hold

Sumary of XAU/USD Forecast: Gold Prices Rebound as COVID-19 Fears Take Hold:

  • GOLD ANALYSIS BULLION FUNDAMENTAL BACKDROPGOLD COCKTAIL: INFLATION, SAFE-HAVEN AND TIGHTENINGBy now we have established that inflationary pressure (globally) is more sticky than initially forecasted by many central banks including the Federal Reserve.
  • This plays into the hands of bullion which tends to outperform in an unrelenting inflation environment.
  • Earlier this week, spot gold fell on the back of a stronger dollar and higher U.S. 10-year Treasury yields (higher opportunity cost of holding gold).
  • Sourcing from ‘hawkish’ Fed minutes and strong initial jobless claims jobs data, the dollar was unrelenting.
  • Initially, other safe-haven currencies picked up momentum (JPY, CHF) as COVID-19 contagion concerns were being mulled over but Friday’s new variant fears sparked a more systemic effect.
  • comGOLD ECONOMIC CALENDARGold market movers next week come from high impact U.S. economic data (see calendar below) of which PMI and NFP data are significant.
  • This being said, a worsening virus circumstances could hold more influence over gold prices next week leaving more room for bulls.
  • Source: DailyFX economic calendarTECHNICAL ANALYSISGOLD PRICE WEEKLY CHARTChart prepared by Warren Venketas, IGThe long-term weekly chart above places gold trading within a symmetrical triangle (black) and while considered neutral in its bias, the pattern often favors the direction of the preceding trend (up).

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