The weakening of the US dollar against major currencies has made gold a safe haven for investors – pushing prices sharply to around $1,813 to $1,843 per ounce since May 7.
Investors continue to fancy gold with unpromising economic data from the US and positive signals emerging from the EU’s growth prospectus continuing to pressure the greenback.
US job creation in April was poor – the non-farming payroll stood at only 266,000 compared to 770,000 in March, forcing unemployment to rise from six per cent to 6.1 per cent despite a vaccination campaign that yielded strong results.
Outside the US, the EU’s economic growth has been strengthening on the back of successful preventive measures to control the spread of Covid-19 and the European Commission’s move to allow tourists to return auguring well for the bloc.
According to industry analyst KITCO’s online survey on gold price trends, 76 per cent of the 1,485 analysts asked expected gold to rise.
Saxo Bank head of commodity strategy Ole Hansen said: “Gold prices may continue to rise due to lower bond yields, prompting investors to switch targets by buying gold instead to hedge losses in the future.”
Therefore, for this week’s trading recommendation, traders should buy gold at $1,798 per ounce, setting the first take-profit function at $1,815 per ounce, the second at $1,823 per ounce, and setting the stop-loss function at $1,790 per ounce.
