Gold stopped reacting negatively to high inflation data. Yesterday the precious metal managed to show near-zero dynamics, despite high consumer inflation in Germany and the E.U. Gold prices recovery after the correction since early February continues.
Investment houses continue to bet on gold’s rise and call for increasing positions on the current correction. We are in line with this opinion, but consider that purchasing gold is reasonable in anticipation of the price’s short-term rebound. Betting on developing a full bullish trend is way too early.
The strengthening of the U.S. dollar will gradually come to an end in 2023. Société Générale strategists believe that investments in gold will be high-yielded.
Stocks will yield less than fixed income. Gold can protect against systemic risk.
The reallocation of assets from the U.S. dollar to gold will help to overcome the decline of the American currency.
A few pivotal moments are expected in 2023, but in general, Société Générale experts await higher yields than last year.
CEO of U.S. Global Investors Frank Holmes shared his opinion on gold. The investor advises to use any correction in the precious metal to increase positions. Frank Holmes points out an inverse relationship between gold and the U.S. dollar. While the dollar is strong, you should purchase gold, he said. Currently, the American currency is weakening after its rally, which has resulted in the highest levels since early January of this year.
According to the technical analysis, on the hourly time frame gold managed to hold its rising trend. There was a rebound from the 200-hour moving average and 0.382 Fibonacci level from the whole wave of growth. On the daily timeframe, gold’s lows were set on the 200-day moving average, which is where the rebound is now coming from. The negative fundamentals are already priced in, thereby making it reasonable to hold long positions in gold.
The growth target will be at the resistance level of $1,865, which previously has been tested several times. Stop-loss might be set when going below the 200-hour moving average at $1,830.
Gold prices are likely to rise:
Take profit – 1,865
Stop-loss – 1,830