2022-03-14 • Updated
Before we answer the questing in the headline, it is important to remember that the circumstances were not ideal for gold during 2021. Yes, the uncertainty was there due to the ongoing waves of the pandemic. Also, inflation was starting to boil, despite repeated efforts of central banks to calm it. However, the US dollar was the winner, not gold. The greenback has bounced back after the US Dollar index recorded its lowest level in December. The real yields were trapped within the 0.50% range over the year after having already seen repeated declines for two years.
Apart from inflationary pressures, all other factors were serving as tailwinds to gold after reaching $2000 in August 2020. But inflation along with the slowing global economy are the factors that make gold shining brighter.
Gold prices rose in recent weeks, as investors turned to safe-haven assets amid rising tensions between Russia and Ukraine. In addition, gold provides a place to hide from out-of-control inflation, and there is no sign that it is going to calm down anytime soon.
The latest CPI data also confirms that the US inflation is still very hot after rising 7.9% year on year. Geopolitical tensions and strong inflation numbers have encouraged some traders to bet on higher gold prices over the next few weeks. Therefore, 2022 gave gold a gift to rise above $2000 for the first time since December 2020.
With gold seen as a hedge against inflation, prices still have room to go up. The uncertainty has pushed investors to buy gold. What are the factors that will help gold rise?
Gold's recent rally is just the beginning of a bigger move in the long term, even if the sentiment among Wall Street and traders weakens in the near term. After the precious metal rose above $2000, this may be a sign that it needs to calm down a bit. There is no doubt that gold is in an uptrend, but some consolidation is needed. Everything that happens around gold supports its long-term rally.
In the end, the war between Russia and Ukraine caused major movements in commodities. Since the invasion on the 24th of February, the prices of oil, gold, uranium and even soft commodities such as wheat have skyrocketed. Although a diplomatic solution to this conflict is likely, the war will have a genuine effect on the markets for years to come.
Bearish scenario: Sell below 2200 / 2194 ... Nearest bullish scenario: Buy above 2197... Bullish scenario after retracement: Consider buys around each indicated demand zone
Bullish scenario: Intraday buys above 2160.00 with TP: 2171 and TP2: 2177 // Bearish scenario: Sells below 2177 with TP1: 2150, TP2: 2142, and 2126
This article uses price action and volume profile techniques to address a fundamental and technical perspective based on the daily chart analysis of spot gold (XAUUSD).
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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