The precious metal Gold, which started the new week on a solid bullish trend to hit a new high at $1950 during the Asian session, has experienced a strong attack by the bears pushing down the gold price to $1940 at the beginning of the new European session.
Many would consider this attack a mere retracement and believe Gold is on its march to the higher resistance at $1,960.00 especially given the uncertainty surrounding the release of the US CPI.
Gold had not been so negatively affected by the worries about inflation and interest rates hikes as it did in the past. The escalation of the Russia-Ukraine wars seems to have placed Gold against all odds, including the Fed's concerns about interest rates hikes.
Similarly, there is an increasing demand for Gold across borders, given the imminent Easter festivity. Gold prices are undoubtedly affected by supply and demand, suggesting that the current uptrend might last all through the season of the festival.
Hence, some analysts at JP Morgan see Gold and other commodities ready to surge by at least 40% if investors boost their allocation to raw materials. Doing so, no doubt would trigger inflows to the precious metal as a hedge against inflation, especially as the Fed seeks to tame the current rising inflation rates.
The first major resistance for Gold, given the current uptrend, is $1960. Once broken then we can expect a retest of the ATH above $2000. On the downside, if the current trend is defeated, then the next support for gold is at $1930 followed by $1920.
The general sentiment towards Gold generally for this week is positive and we expect that the positive trend will sustain in higher regions.