349
136 shares, 349 points

Gold price hovered near the key $1,800 level on Monday. Behind this rally is the weaker dollar after investors’ possible response to the US Federal Reserve’s (FED) inflationary pressure, after its chairman said inflation could take longer than expected. An ounce of gold is trading at $1,800 with an increase of 0.43%, while December gold futures are changing hands at $1,800.7 with an increase of 2%.

Gold price moved with the speeches of the Fed Chairman

Cryptocoin. com

As we reported , the metal on Friday rose to its highest level since early September before cutting gains after Fed Chairman Jerome Powell said the US central bank should start reducing its asset purchases. “There is some short-term momentum forming in gold as some investors are seeking an inflation hedge and gold is seen as potential in that regard,” said Kyle Rodda, an analyst at IG markets.

Rodda added that $1,830 is a key resistance if gold rises above $1,800. But in the long run, Rodda said, gold’s trajectory mainly depends on how aggressively central banks will act to contain inflation. Gold is often considered a hedge against inflation, but reduced stimulus and interest rate increases increase government bond yields, providing a higher opportunity cost for bullion.

According to the technical analyst, these levels should be watched below

“Gold will struggle once it becomes clear whether it can meet the announcement of a contraction next week, especially if, as expected, US yields and the dollar start to rise again as expected,” Jeffrey Halley, senior market analyst at OANDA Asia-Pacific, said in a note. Market participants are now watching the Bank of Japan (BoJ) and European Central Bank (ECB) meetings on Thursday.

Adding support for gold, the dollar eased 0.1%, making bullion more attractive to buyers of other currencies. On the technical front, gold could retest the resistance at $1,814 an ounce, a break above it could yield gains of up to $1,826, according to Reuters technical analyst Wang Tao.


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