Forex forecast for today. Gold is growing to $1900?
The price of gold rose to the level of $1742 per troy ounce and reached the highest level in a week.
As the yield of US securities falls, the opportunity cost of owning the precious metal decreases, which has a positive effect on its price. Investors are confident that the markets will not see another jump in yields, and this increases the demand for gold. The dollar also fell 0.7% against a basket of rival currencies, boosting the commodity market.
Citibank expects gold to mostly hover in the range of $1700 to $1900 an ounce for the rest of the year, with an average price of $1800.
The bank sees several key risks for the precious metals market. These include a reduction in the US Federal Reserve's asset purchases by the end of 2021, and the expectation of a US interest rate hike in 2022 - 2023. The rise in 10-year treasury bond yields this year is also a drag on long-term zero-payout assets such as Gold. In order for the demand for precious metals to gain a foothold, either some geopolitical problems or an aggressive increase in consumer inflation are necessary.
In the forecast, I assume a further recovery of Gold to the resistance level of 1760 Dollars per troy ounce.