Gold prices rebounded on Tuesday from a one-week low after the publication of data showing a sharp increase in inflation in the United States. The quotes rose to the level of 1745 dollars per ounce and again came close to the strong resistance of 1750.
The US Dollar Index fell to a three-week low after the release of inflation data, reducing the value of the precious metal for holders of other currencies. The yield on 10-year treasury bonds also fell. Economists predict a short-term period of high inflation in the United States, so the activity of buyers will continue in the coming months. Geopolitical risks associated with Iran's decision to enrich uranium to record levels also supported demand for the precious metal.
American Citibank recently published its updated forecast for the price of gold for the current year, which was again adjusted downward. The average estimate of the value of gold at the end of 2021 was lowered by 4% — from 1800 to 1720 USD per troy ounce. For the next three months, the forecast was $1,675 per ounce, and the long-term estimate for 12 months indicates the value of the asset at $1,575. As for 2022, the forecast was immediately reduced by 8%. According to Citibank analysts, gold has already passed its peak in 2020, and in this and subsequent years, prices will gradually decline. Although the soft monetary policy of the Federal Open Market Committee stabilized the asset's sell-off in March, analysts doubt that a new upward cycle can occur in the near future.
Gold Trading Signal
In the forecast, I expect a further recovery in the price of Gold to 1765 Dollars per ounce.