The price of gold continues its steady growth. The reason is that China is lifting COVID restrictions, putting pressure on the U.S. dollar against the growth of risky assets.
Since January, inbound travelers are no longer required to be under quarantine in China. The rapid lifting of the country's strict pandemic regulations could help improve the health of Asia's largest economy.
Traders are happy with analysts' forecasts of the next year price of gold:
ING analysts believe gold could hit $1,850 by the end of 2023.
Swiss Asia Capital chief investment officer Jurg Keener predicts that gold prices will rise to $4,000 per ounce in the coming year.
According to the forecast of Bank of America’s analysts, the rate of gold may rise to $2000 per ounce.
The Danish Saxo Bank analysts' opinion on the gold rate’s dynamics during next year is similar to the forecasts of Bank of America.
The forecasted data on consumer inflation in the U.S. affects gold quotes in a good way. According to a University of Michigan survey, the annual inflation is forecasted to be 4.4%. The forecast was published this month along with the report on general consumer sentiment. The figure was also down from a preliminary reading of 4.6%, which was predicted two weeks ago. Thus, the U.S. consumer inflation forecast fell to an 18-month low.
According to the technical analysis, gold is in a narrowing uptrend. At the moment, the quotes are approaching the lower boundary, from which speculative purchases of the precious metal can be made with. The aim is going to the upper boundary, near the level of $1840.
The gold growth strategy may be ruined by the RSI divergence. The indicator is in a downtrend, while gold is in an uptrend. It means that a correction of the precious metal is possible. However, this divergence might last for some time, despite the growth of gold.
Since there is a risk of a level’s break-down, a stop loss should be put around $1785, which is below the uptrend level.
Take profit – $1840
Stop-loss – $1785