(MENAFN- Khaleej Times)
Gold price is forecast to touch $1,900 an ounce in the coming days after precious metal rose to over three and a half month high on Tuesday due to global inflation concern and weakening of the US dollar, say commodity analysts.
Spot gold price was trading at $1,873.28 an ounce at 4.40pm UAE time on Tuesday evening, up 0.22 per cent or $4.2 an ounce.
However, commodity analysts believe that the precious metal could face correction before hitting $1,900 mark.
''Fundamentally, the combination of weaker-than-expected US jobs report, which requires the continuation of the loose US Federal Reserve policy, and the rising inflation is supportive of gold prices in the medium run. But I am also wondering whether the sell-off in Bitcoin has a finger in the strengthening gold rally, as we started seeing bigger jumps in gold prices since we started seeing sizeable drops on Bitcoin’s,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
''The next natural target for the gold bulls is $1,900 per ounce, but there could be a stronger resistance approaching this level… Unless there is a rush to safe-haven currencies globally, gold needs a correction before gathering enough power to fight back the $1,900 resistance,” he said.
Ozkardeskaya sees one major threat to the gold rally is an eventual pick-up in the US yields, and the rising inflation worries could trigger that.
Naeem Aslam, chief market analyst at AVA Trade, says serious momentum is continuing to back gold prices over the past few days.
Investors believe that that inflation is going to run hot, and it will remain above the Federal Reserve’s target of two per cent.
''Higher inflation numbers are going to keep the shine in the gold price, and it is highly likely that we may see the gold price topping 1,900 mark in the coming days. This is because the Federal Reserve is unlikely to adjust its monetary policy to handle inflation as it continues to believe that the surge in inflation is nothing but temporary,” said Aslam. —
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