Gold Forecast

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From a technical perspective, gold (XAU/USD) has been trading in a tight channel near $2,300. The 20 Simple Moving Average (SMA) remains flat just above this level, while longer-term SMAs maintain their upward slopes well below the current price. Technical indicators are holding within negative levels with uneven strength, skewing the risk to the downside. On the 4-hour chart, the pair is currently developing below bearish 20 and 100 SMAs, although a modestly bullish 200 SMA. However, buyers do not seem particularly interested at the moment1.

Considering historical seasonality, July has been a very bullish month for gold. Over the past 5 years, it has been the fourth best month of the year for the precious metal, averaging a gain of +2.69%. Over the past 10 years, it has been the third best month, averaging a gain of +2.04%

Furthermore, in April 2021, gold rebounded as inflation concerns rose and the dollar weakened. It marked a turnaround from the first three months of the year, with gold gaining 4.5% in April to finish the month at US$1,768 per ounce – its highest monthly closing level since January and its first positive monthly return since December 2020.