Gold maintains an upward trend due to the weakening dollar and the decline in the yield curve of the US Treasuries.
The American currency is under pressure in anticipation of the Fed meeting at which the regulator may signal the need for further easing of monetary policy amid the spread of the pandemic and the inability of legislators to agree on a new package of economic stimulus measures.
The Senate Banking Committee stated on Monday that Fed Chairman Jerome Powell and US Treasury Secretary Stephen Mnuchin will testify before the COVID-19 Committee.
Citigroup analysts yesterday published a 12-month forecast for gold, within which the promising target is the level of $ 2,400 per ounce. The main growth drivers mentioned are the weakening of the dollar and the negative real profitability of the US Treasuries.
Morgan Stanley experts believe that by the end of this year, the yield on 10-year debt securities will remain below 1%. At the same time, the real profitability will be even lower due to the growth of inflationary expectations. Obviously, under these conditions, the investment attractiveness of gold remains much higher.
In the long term, gold has a good chance of continuing the global bullish trend.
On the chart, the bulls are testing the 1967.00 mark. We have not yet seen a strong reaction to the level. We still consider the bullish scenario of the movement as a priority. We are expecting a breakdown of the 1967.00 level and the growth of quotations to 1993.00.
· Resistance levels: 1967.00, 1993.00, 2030.00.
· Support levels: 1940.00, 1914.00, 1900.00.
The main scenario - a breakdown of the resistance at 1.1967 and growth to 1993.00.
An alternative scenario - a consolidation in the range of 1940.00-19670.00.
The current fundamental outlook is moderately positive. We expect an entry point to be near the level of 1953.00.