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After hitting its highest level in several months last week, gold is expected to consolidate below the $2,000 an ounce mark.
The precious metal has gone up by 6.4 percent over the last 30 days and nearly 7 percent over a six-month period. On Thursday, spot gold was up 0.02 percent at more than $1,896 an ounce. In the UAE, gold was trading at 176.75 dirhams (18K) and 230 dirhams per gram (24K).
“Gold may face a period of consolidation as the next big level of resistance at $1,923 [an ounce] looms… Gold support [is] at $1,890 and $1,870, followed by the big one at $1,843,” Saxo Bank said in a research noted released on Thursday.
“However, an improved technical outlook during the past couple of weeks have finally started to see longer term trend funds calibrate their positions through constant bidding in smaller lots, hence the lack of major setbacks so far.”
Gold’s recent rise has been due to a weaker US dollar and fears about inflation.
However, Saxo Bank noted that the greenback has strengthened since yesterday together with silver and platinum’s inability to keep up with gold’s recent rally. Traditionally, a strong dollar does not help gold prices move upwards.
US Federal Reserve vice chair Randal Quarles also allayed inflationary concerns on Wednesday, citing that inflation will “begin subsiding at some point over the next several months”.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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