Gold is correcting amid expectations of an interest rate hike by the Fed.
U.S. inflation is expected to continue declining. Nevertheless, pension funds are still resistant to investing in risky assets. According to Ortec Finance's report, funds are increasing their positions on the gold market.
Fund managers are optimistic about the continued slowdown in inflation. However, gold and other commodities are preferred for purchases.
70% of respondents stated their plans to increase their positions in the market of these assets. At the same time, 40% of respondents directly said about the growth of their investments in gold.
Analysts expect gold prices to rise to historical highs amid high interest of investment funds in gold as a strategic asset. At the same time, the bullish positions of funds in the gold market are still relatively low compared to the highs of the last year.
According to the Commodity Futures Trading Commission, fund managers have net long positions in gold for 104,000 contracts. This is only 27% of the peak in 2022. Investors were resistant to buying gold, but now the situation has changed. In March, gold ETFs received their first net inflows in 10 months.
Managing funds, increasing their positions on the gold market can lead to increased demand for gold and, consequently, to an increase in its price. If pension funds continue to prefer investing in gold and other commodities, it could also support the price of the metal.
The U.S. manufacturing PMI will be published today at 16:45 Moscow timeframe. If the PMI data in the U.S. is in the green zone, it could point to production growth and economic development. Positive data will increase demand for industrial and precious metals. This, in turn, can support the rise in the price of gold.
The price of gold has formed a channel in the direction of the main exiting trend on the H4 timeframe. The price of gold declined during the week and is approaching channel support.
On the H1 timeframe, the RSI indicator curve (standard values) is approaching the oversold zone. The combination of the price approaching support and oversold condition increases the possibility of a trend reversal to the opposite boundary of the ascending channel of the H4 timeframe.
Signal:
The medium-term prospects for gold are buying.
The target is at the level of 2060.00.
Part of the profit should be fixed near the level of 2012.00.
The stop-loss is at the level of 1960.00.
Bullish trend has a short-term character, so the volume of trade should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
