- Gold prices continue to gain despite some signs of reduced risk aversion
- The prospect of few US rate rises ahead, if any, supports the market
- A new push above $2000 looks quite likely
Gold prices remain tantalizingly close to that psychologically important $2000/ounce handle on Friday, perhaps with divergent market impulses draining bulls’ appetite to try it as month-end is upon us.
On the one hand, a general prognosis that United States interest rates won’t be rising much further seems to be taking hold. Market expectations are that we’ll get one more quarter-point increase this year, assuming that inflation shows further signs of coming to heel. Higher interest rates sap appetite for non-yielding assets such as precious metals.
On the other hand, there’s been a modest re-emergence of risk appetite, boosted by hopes that banking stress rooted in higher borrowing costs won’t morph into a more widespread financial crisis. There were significant worries on this score earlier in the month when a couple of medium-sized US lenders got into difficulties and European giant Credit Suisse was rescued by long-time rival UBS Ag.
Gold Prices Technical Analysis
The broad uptrend from last November’s lows is clearly very much intact, with no test of its lower bound seen since prices bounced at 1809.31 on March 8. The lower bound is now well below the market and guarded by various likely supports, not least the Fibonacci retracement of the rise up from November to this month. They come in at $1916.34 and $1857.89.