In the Forex market, gold is a form of currency. It is known to be a “safe-haven” asset, expected to increase its value in times of volatility and economic uncertainty. Gold (XAU/USD) consolidates recent gains around $1,800, refreshing intraday low during early Tuesday following a five-day uptrend.
This week, we find that the price of gold has reached the level of $1800. The rise in the price of gold is supported by the issue of inflation in the US after United States Secretary of the Treasury, Janet Yellen said that the inflation rate will not decline until next year.
In addition, majority of market analyst said “If the price of gold manages to reach $ 1800, the main resistance is at $1830. This causes the investors could look for opportunities to buy gold for the short term as they looking for an inflation hedge”.
Other than that, most investors are also waiting for the meeting of the Bank of Japan (BOJ) and the European Central Bank (ECB) this Thursday. The two central banks are not expected to change policy, but market indicators suggest higher inflation than the ECB’s guidance.
In conclusion, the price of gold has reached $1810 and may be able to rise to a higher price in near future. The dollar also depreciated by 0.1% which makes gold become an attraction for investors.
Based on the technical front, overall gold is up for pleasing the bulls before the next test around $1,834.
Source: The Edge Markets