Are you keeping a close eye on the stock market and looking for new opportunities to invest? Well, you’re not alone! Traders everywhere are anticipating more monetary easing from major central banks, such as the U.S. Federal Reserve. This move comes as inflation risks seem to be diminishing, making the case for gold even stronger. Investors are betting that central banks will maintain loose monetary policies for the foreseeable future, leading to a significant 31% increase in spot gold prices this year.
When it comes to technical analysis, experts like Kinesis Money analyst Frank Watson suggest that gold may face resistance at $2,750. This level represents the upper boundary of a rising trend channel that has been in place since late July. While gold is currently benefitting from strong investor sentiment and high conviction trades, there is a possibility of consolidation or profit-taking at these elevated levels. Independent analyst Ross Norman noted that gold’s impressive surge seems to be overlooking factors like declining inflation and stable Treasury yields.
On the macroeconomic front, U.S. Treasury yields remained stable following robust retail sales data in September, which surpassed expectations and reflected robust consumer spending. Additionally, weekly jobless claims were lower than forecast, indicating the resilience of the U.S. economy. Investors are eagerly awaiting more data on housing starts and comments from Federal Reserve officials to gain further insights into future monetary policy decisions.
Looking ahead, the market forecast for gold remains bullish amid geopolitical uncertainties and expectations of prolonged monetary easing. With ongoing geopolitical tensions and the likelihood of continued central bank support, investors are likely to seek shelter in gold as a safe haven asset. Although resistance at $2,750 is a possibility, the overall trend remains upward, supported by both fundamental and technical factors. Any escalation in Middle East tensions or signs of extended central bank easing could propel gold prices higher, with the next major target set at $2,750.
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