Gold price rallied on Friday as the dollar continued to weaken, helping bullion back on track for a second weekly gain amid comments for more aggressive Federal Reserve monetary policy. So, what should investors expect now? Will there be a break in the precious metal? Or will it continue to trade at certain intervals? Here are the analysts’ comments…
What are the support and resistance levels for the gold price?
Spot gold is changing hands at $1,858, up 0.43 percent as of writing. Gram gold is around 979 liras. U.S. gold futures were up 0.2 percent at $1,851.00. So far, gold bullion is up 0.5 percent. DailyFX currency strategist Ilya Spivak said gold this week was supported by some moderation in market expectations of the Fed’s monetary policy for the coming year, and most importantly, by the weaker US dollar.
Spivak added that there is $1,830 price support on the downside and the next key level on the upside is around $1,885. The minutes of the Fed’s policy meeting released on Wednesday, May 3-4, highlighted that, as the market expected, most participants favored an additional 50 basis point hikes at the June and July meetings. Higher short-term US interest rates and bond yields increase the opportunity cost of holding bullion. The dollar index fell a second week on the way, making bullion cheaper for buyers holding other currencies.
SPI CEO: We can trade within range
SPI Asset Management CEO Stephen Innes said: “Hard economic data is getting worse for the Fed to consider a pause. “We need a clearer signal… If the Fed signals a pause, gold will move much higher, but we can trade within a certain range for a while until this uptrend happens.” Spot silver was up 0.7 percent to $22.14 an ounce and has gained nearly 1.7 percent so far this week.
