The Gold Price has closed higher for the fourth straight week. Increased central-bank buying and inflation fears has analysts predicting even higher prices.
Gold (XAUUSD) closed at $1,903.50 and above the $1,900 level for the first time in five months. Since March, Gold has gained over +13% as inflation concerns have investors flocking to the shiny metal.
Yesterday’s U.S inflation data confirmed these fears, showing the cost of living is continuing to increase at an alarming pace.
The Core PCE Index saw the highest annual rise in almost 30 years at +3.1%.
It has been revealed that China has stepped up its purchase program. The news that Swiss vaults are seeing record outflows to the country is likely to boost the Gold price further.
This had led to several bank analysts increasing their price forecast. Credit Suisse predicts the Gold price could return to the August 2020 high at $2,075.00
We can see on the weekly chart that the Gold has convincingly broken out of a descending channel. The Parallel formation has been in place from the $2,075.00 all-time high.
The breakout came last week when the price traded higher through $1,867. However, this weeks positive close reinforces the move.
There are now two clear technical targets on the upside. The first is $1,960.00. This is a strong level of resistance and reversed two previous rallies in November and January.
Should the price clear $1,960. The ATH at $2,075.00 becomes the next level to watch.
However, the price will be reactive to Fed speak and the evolving inflation picture. If the Gold price falls back within the trend line at $1,862.00, it will cancel the immediate bullish outlook.
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