Gold prices have surged past $1,900 in the past few days. However, the long-term XAUUSD forecast is bearish, and the recent push to the upside is due to the current inflation and uncertain political environment.
Gold investment has always been the go-to option during uncertainty and inflation. However, recent reports of high inflation rates have caused panic in the markets. This has resulted in people hedging against inflation by buying gold. There have also been international reports of the possibility of war, another contributing factor of why the prices of gold increase.
XAUUSD recently crossed the $1,900 level and moved up to test a resistance long-term resistance level $1914 unsuccessfully. The prices then retreated downward and are currently trading at $1903. In my XAUUSD forecast, I expect the gold price to hit the resistance level of $1914 again. This is because the recent fears of war breaking out between Russia and Ukraine are creating a lot of uncertainty.
As a result, Investors will be looking for a safe investment, which in most cases is gold. However, I also expect the prices to drop after hitting the long-term resistance level of $1914. I expect the prices to move downward and retest the long-term support level of $1852.
However, should the prices of gold retest the resistance level of $1914 and break out of the current support and resistance structure. My trading analysis will have been invalidated, and traders can expect a long-term upward move.
To caution against inflation and any uncertain political turmoil that can happen anytime, investors have always invested in gold. Today, gold is still one of the safest investment options available. Although the US dollar mainly backs it, they don’t always move in the same direction. This is especially true during inflation when gold prices increase as investors buy them to hedge against the dollar, making gold a perfect commodity to invest in.
This post was last modified on %s = human-readable time difference 16:11