Gold buy

Gold consolidated above 2000 on updated IMF forecasts

12 April 2023 191
Gold consolidated above 2000 on updated IMF forecasts

The price of gold continues to move in an uptrend.

The precious metal positively reacted to the IMF forecasts. The International Monetary Fund updated its forecast for global economic growth in 2023, reducing its medium-term expectations to their lowest level in thirty years. A sharp slowdown in economic development is likely to occur in case of further interest rate hikes by the Federal Reserve (Fed).

According to an IMF report released on Tuesday, global GDP will increase by 2.8% this year. In 2024, the growth will reach 3%. This figure represents the lowest medium-term forecast for global economic growth since the report was published in 1990. All factors that could slow down the economic development of countries were taken into account in the calculations. Experts highlight the crisis in the banking sector and the increase in inflation rates among them. 

According to IMF analysts, the situation in the market is quite unstable. The Fed's tightening of monetary policy over the past 12 months is starting to have a negative impact on the financial sector. 

Amid uncertainty and risk, market participants look for stable assets, such as gold, to retain their investments. If economic uncertainty and risks increase, the demand for precious metals may rise and increase their value as well.

In addition, U.S. Treasury Secretary Janet Yellen said that the economy has improved over the past six months. In her opinion, shocks in the banking sector have not limited the availability of loans.

According to the Fed's latest report, lending in the country fell to a record low in the last two weeks of March. This reduction came after the collapse of two U.S. creditors.

Yellen did not change her mind even after the Fed data publication, so the market was skeptical about her words. On this background, gold reached $2,000 per troy ounce again.

On the H1 timeframe the price of the precious metal is in the process of the third ascending wave formation. The third wave will show the real movement impulse only after breaking through the level of 2032.00, which is the top of the first wave. However, on the H4 period the price was already in the impulsive phase of the third wave formation, which gives a signal to buy at the current price.

Gold consolidated above 2000 on updated IMF forecasts - Photo 1

Signal:

The medium-term prospects for gold are buying

The target is at the level of 2085.00.

Part of the profit should be fixed near the level of 2032.00.

The stop-loss is at the level of 1980.00.

Bullish trend has a medium-term character, so the volume of trade should not exceed 1% of your balance.


This content is for informational purposes only and is not intended to be investing advice.

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