Gold price (XAUUSD) is in its second consecutive days in the green today. The metal is up by more than 0.62% and is trading at $1996, which is a few points below the important psychological level of $2,000. It is also at the highest level it has been since Tuesday last week, when it declined by more than 6%. Other metals are in the green also, with silver price rising by more than 2%.
Weak US dollar and gold
The main reason why gold price is rising today is mostly because of the weaker US dollar. The US dollar index, which is a universal gauge of the strength of the greenback, is down by more than 0.25% today. That is because the dollar is down by 0.35% against the Japanese yen, 0.25% against the Swedish krona, 0.23% against the Canadian dollar, 0.20% against the euro, and by 0.30% against the British pound.
As I have written before, gold price has an inverse relationship with the US dollar. This means that gold price tends to strengthen when the US dollar weakens. This is because, to most people, gold is often the currency of the last resort.
Gold price is also rising because of revelation that Warren Buffett has invested in a gold-mining company. For starters, Buffett has criticised gold because of its lack of yield, like stocks and bonds. Therefore, he caught investors off-guard when he invested in Barrick Gold, one of the biggest gold mining companies in the world.
Standard Chartered analysts bullish on gold
Meanwhile, analysts at Standard Chartered believe that gold price will continue rallying. In an interview with CNBC, Manpreet Gill, a strategist at the bank said that he believed that gold’s run would continue. He said:
“One of the best explanations of why gold has surged the way it has through this year have been bond yields. Net of inflation or what we call real bond yields, those have been sort of on (a) one-way tear and that’s sort of lined up very nicely with move in gold.”
Gill is not the only Standard Chartered analyst bullish on gold price. Yesterday, I cited Suki Cooper, an analyst at the bank, who said that she expected that gold price and silver will continue rising.
Gold price forecast
The weekly chart shows that gold price has been in a strong upward momentum since August 2018, when it was trading at $1,158. Since then, the price has soared to an all-time high of $2076, which was reached three weeks ago. The price is above the short, medium, and longer-term moving averages. Also, the RSI has moved from the overbought level of 80 to the current 70.
Therefore, I suspect that the price will continue rising as bulls aim for the next resistance at $2,100. On the flip side, a move below the support at $1,800 will invalidate this trend.