Forex. Gold trading forecast and signals for today May 3, 2021
On Friday, Gold was almost unchanged in price after a sharp drop the day before. The quotes reached the level of $1,770 per ounce.
The yield on 10-year U.S. Treasury bonds rose to a more than two-week high. The main triggers were President Joe Biden's new proposal to increase government spending by trillions of the US Dollars, and data that showed an acceleration in economic growth in the first quarter. The increase in the yield of treasuries increases the opportunity cost of owning gold and leads to a drop in the price. Last week, the quotes declined again, having turned around from the maximum value since the end of February.
Gold has been in a downtrend for more than six months. Despite this, there is still a good chance of further growth in the price of the precious metal. An increase in inflation expectations and a weakening of USD, as a result of aggressive fiscal and monetary incentives, will cause an increase in demand for safe-haven assets. Government bonds will not be able to play the role of such protective assets in the face of inflation and negative interest rates, because they will no longer generate income. An increase in investment demand and a gradual recovery in consumer demand in China and India will also support the precious metal exchange rate at a high level.
Gold trading signals for today
The forecast assumes a recovery in the price of Gold to the levels of 1775, 1780 and 1790 Dollars per ounce.