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Weaker Dollar Could Push Gold Back to 1900

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  • Gold bulls are returning to the market, but can they stay long?
  • Poor NFP data could push gold higher.
  • Gold is experiencing resistance at the 22-SMA in the charts.

The gold weekly forecast is up as a possible pause in rising interest rates could return its appeal as a hedge against a possible recession.

Last week, gold had its second bullish week, closing at 1853.46. The weaker dollar brought on this move, which was also lost for a second week, closing below 102.00. This move was due to poor GDP data from the US, which pointed to a slowdown in the economy.

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Oddly, rising global inflation has not pushed gold prices higher in previous weeks. It could be because of the tight monetary policy adopted by most central banks in raising interest rates. These hikes have seen the dollar skyrocket and gold lose value.

The FOMC meeting minutes released last week gave investors a bit of hope. The minutes pointed to a possible pause in hikes come September if the economy deteriorates due to rising interest rates.

This news could mean a weaker dollar in the future, pushing gold prices higher. There are fears of a recession, and if monetary policy eases, we could see investors buying gold to hedge against rising inflation.

Gold key events next week

gbp/usd weekly news

Gold investors expect consumer confidence in economic activity in the US to drop from 107.3 to 103.9. A lower-than-expected value could push the dollar lower and gold higher. Investors will also be keen on the unemployment rate, which they expect to decrease from 3.6% to 3.5%.

If the unemployment rate went up in May, this would signal a tighter labor market that would be bearish for the dollar and bullish for gold.

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Gold weekly technical forecast: 22-SMA resisting

gold weekly forecast

The daily chart shows gold pulled back to the 22-SMA last week, closing on a bullish candle after being supported at the 1800.00 critical level. Gold might either break the SMA to the upside or bounce to the downside.

A break above SMA could see gold get to 1900.00 in the coming week. If prices push lower, then the metal might retest the 1800.00 level. The gold weekly technical forecast remains bullish as RSI has stayed above the 30 level. This bias will only change if RSI can get below 30.

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