The price of Gold broke the coveted level of $1,900 per ounce and reached the level of 1,904.
Quotes are consolidating at the highest level in the last four months, as a reaction to the comments of the US Federal Reserve representatives, designed to dispel fears of inflation. The Central Bank said in a statement that the increase in prices is associated with interruptions in the supply of certain goods and a shortage of their supply on the market, which is a natural phenomenon. Fed officials also confirmed that any price increase would be temporary. US inflation is expected to be above 2% in 2021 and 2022. These statements about the temporary nature of inflation are enough to maintain a short-term upward momentum for the Gold price.
Many investors are concerned about the medium-term risks of rising prices, and traditional means of investment, such as Gold and certain types of stocks, are now better suited to reduce risks. Cryptocurrencies are not quite suitable for this due to their high volatility in recent weeks. Pricing in the cryptocurrency market creates the impression of the formation of another bubble. When most of the price increase is associated with speculative actions, the situation can change at any time, especially if the financial incentives from Central Banks disappear. From the point of view of diversification, it is still unclear whether cryptocurrencies have the characteristics of a protective asset that investors are looking for to preserve their capital. That is why the strong drop in the crypto asset market supports the demand for precious metals.
Signals for trading Gold
In our forecast, the price of Gold is expected to rise to the levels of 1910, 1915 and 1920 Dollars per ounce.