Technical analysis update: XAUUSD (26th May 2021)

2021年5月26日

As our price target for 2021 (from 16th April 2021) of 1900 USD has been reached we would like to provide you with new update on gold price. On weekly timeframe bullish trend remains intanct. Bullish thesis is supported by bullish RSI and Stochastics. Withihn real economy we are seeing soaring prices almost among all asset classes and this pinpoints to the higher than usual inflation and subsequent decrease in the purchasing power of fiat currencies. We expect the central banks to continue their quantitative easing policies for long time since they do not have any other solution available. At the same time we do not expect central banks to raise interest rates for another 3 years. Gold tends to perform well in such time periods and because of that we would like to upgrade a long term price target to 2100 USD per ounce. However, we need to point out that on daily time frame gold shows strong signs of being overvalued. Price is currently far from 20-day Simple Moving Average , RSI is highly overvalued, ADX peaks (all on 1-day timeframe). In addition to that, last week we saw that correction in gold failed as gold stopped its decline around 1852 USD. This is sign of strong bullish trend of higher degree. But in the short-term potential of sharp and shortlived correction increasingly grows.

Our forecast from 16th April 2021.

Last week’s price action as fall in cryptocurrencies halted a decline in gold around 1852 USD. We think this price level should serve as strong support for next correction when it occurs. Investors should be on look up for increased activity in gold within following 2-3 weeks as 16th June approaches (and with it FOMC’s decicison).

Disclaimer: This analysis is not intended to encourage buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.