Gold has been going up since the beginning of March, which is what we expected. Gold, as the hedge against inflation, should be rising with the inflation rate. Also, as can be seen from the 4-hour chart, the price has been rising at a mild angle for almost two months. Since the inflation rate has not made any dramatic jumps, Gold has moved at a gentle pace. Although the price has climbed slowly, as inflation continues to go up, we can assume that Gold will go up as well.
.png?width=4920&name=Graph%20Template%20(43).png)
Where do you see the inflation rate in the near future? We have some hints here. First, US S&P/CS Composite-20 HPI y/y just released on May 25th. This reviews the change in the selling price of single-family homes in 20 metropolitan areas. Although this signal is very partial and we cannot see the big picture of the economy, it still hints if the economy is recovering or not, especially from the pandemic. All credible analysts think the economy is recovering, therefore can we expect the US dollar to calm down? Is this a signal for Gold to meet resistance? We all know about the correlation between the US dollar and Gold. It is definitely something to look into.
We love to hear new ideas from traders and want to know what you think!
If you like this topic and want to suggest future topics that you find helpful, let us know by clicking the ‘submit your feedback’ button below.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.
