US economy rebounds on pressure on Gold price down
At the beginning of the new trading week, the price of gold fell to the support level of $ 1,710 per troy ounce.
The precious metal remains under pressure as the US economy continues on course for a full recovery. However, the fall in US Treasury yields provided some support to prices. On Monday, the yield on 10-year bonds was 1.66% and fell immediately by 1.05%. This is significantly lower than the record high level in mid-March.
Currently, the value of gold is almost not determined by the demand for jewelry. In China, sales of gold jewelry in major urban retail stores more than doubled during the Lunar New Year holidays compared to last year. In Asia as a whole, buyers are taking maximum advantage of the drop in prices to almost a nine-month low. Lower import duties have also made the precious metal cheaper in India, which imports almost all of the gold consumed. According to preliminary estimates, in February, purchases of the precious metal reached the highest since the end of 2019. All this does not allow the market to stay at the achieved levels, quotes break through local lows almost every day.
The short-term outlook for Gold also looks weak. Investment banks are changing their forecasts for the worse. The consensus forecast implies a drop in quotations below the key support of $ 1,700 in the near future.
In my trading forecast, I expect the price of Gold to decline to the level of $ 1,690 per ounce.