Gold – Momentum to Invest Now?

U.S. inflation accelerating to highs never seen before in over 30 years has swayed investors away from dollar-backed assets, and towards the safe haven. November holds more inflation reports due to G10 economies, which can further boost the safe haven. However, speeches from multiple European Central Bank (ECB) and Federal Reserve policymakers could determine whether the bullish gold will remain on an uptrend directory. Should inflation continue to persist and central banks not adhering to the ongoing inflationary pressures, could bring about new lows in real yields, Golden Brokers reports in its analysis.

Things took a turn on November 4^th, Gold futures began trading with high volatility. Despite a stronger dollar greenback which typically moves inversely to the precious metal, the safe haven traded 0.98% higher to value at $1,794 per ounce. The precious metal’s bullish momentum has only begun. On November 7^th, gold futures escalated strongly as markets and their investors began anticipating more patient U.S. Federal Reserve future initiatives, despite Fed Chairman Jerome Powell indicating uncertainty regarding inflation. Because of this, gold futures rocketed 1.47% to value at $1,817 per ounce.

After passing the $1,800 benchmark, gold has gained upward momentum. Gold futures continue to escalate due to hotter-than-predicted U.S. inflation data, despite the dollar greenback surging, which typically moves inversely to the precious metal. The safe-haven climbed 0.68% to value at $1,862 per ounce. In the second week of November, gold futures continued to edge higher due to high inflation, which adversely affected consumer sentiment, regardless of a three-month high U.S. dollar. As of the 15^th of November, gold futures are currently valued at $1,859 per ounce.

Analysts expect that if gold drops below the current support level of $1,844, it can be the end of the rally. On the other hand, a move past the current resistance level of $1,867 mark is likely to spark a fresh wave of rallies for the precious metal, which can push its price beyond the $1,900 mark. Investors await a good entry point, keeping their eyes on gold price movements with an optimistic outlook for the future.

Muhammad Zulbahri Mohd Rajdi

Chief analyst
Golden Brokers

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