Gold’s Record-Breaking Rise and Influential Factors

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After the yellow metal’s gains surged by approximately 9% in the first quarter of this year, gold continues its upward trajectory, reaching $2,265 yesterday, marking a new record high. It appears that this positive momentum will persist in the upcoming period, with gold having risen by roughly 14% since its February 14, 2024, low of $1,984, to yesterday’s peak of $2,265.

As for the technical and fundamental factors that may support it, we mention among them:

  • Continuing geopolitical tensions in the Middle East, the Red Sea, and the Russian-Ukrainian war
  • Expectations that US interest rates will be reduced three times this year, and the first reduction is expected to be in June, which will give positive momentum to the yellow metal, which does not generate any return for investors. The lower interest rates, the more attractive gold becomes.
  • Global central banks, led by the People’s Bank of China, increase their gold reserves.

It seems that technical indicators may support gold prices in the next stage for several reasons:

First: The regularity of the 20-, 50-, and 200-day moving averages and their upward trend, as the 20-day average exceeds the 50-day average, and the 50-day average exceeds the 200-day average.

Second: The Relative Strength Index (RSI), which currently records 79 points, meaning that it is in the overbought area, which indicates upward momentum for the yellow metal.

Third: The MACD indicator is in blue, which exceeds the orange SIGNAL LINE and is also in the positive zone, which gives positive momentum to the yellow metal.

Finally, the markets are closely awaiting the release of indicators of the non-farm employment report, the unemployment rate, and average hourly wages in the United States of America on Friday, which will be directly reflected in the movements of gold prices, as any weakness in these indicators will give upward momentum to the yellow metal.

 

 

 

 

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

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