Stephen Innes, managing partner of SPI Asset Management, said that gold has received a lot of support from inflation concerns and yield tendencies, which is quite beneficial for the dollar to continue to weaken. Gold bulls are now looking at $2000, and most people think the price of gold will continue to rise. Avtar Sandu, senior commodities manager at Huili Futures, said in a report that prices had been supported by US government negotiations to launch another $6,000bn super-large fiscal stimulus in fiscal year 2022. There is a divergence between stable nominal Treasury yields and gold, and weak non-farm payrolls data could propel gold prices to levels last seen in 1975.

At present, the gold price is optimistic, recently supported by the 50-day moving average, and returned to the optimistic trend on the momentum line. However, the level barrier around $1910-$11 is a key resistance point for gold to look further around $1930, reaching an one-month upward trend. Once it breaks through the $1930 level, gold is expected to start challenging annual highs around $1960. In the downward direction, the next support level of gold looks towards $1900, further towards the 50-day moving average of nearly $1890 and the support range of $1875-73. Once it falls below $1873, gold could fall back to close to $1845 in early May.

Amid heightened inflation fears, uncertainty about the Fed's next move has weighed on market sentiment. After the release of the core personal consumer price index ((Core PCE Price Index)) on Friday, market participants expected Fed policymakers to abandon dovish tendencies and hint at a reduction in bond purchases as the ban period ahead of the Federal Open Market Committee's (FOMC) meeting in June approaches.

In addition to the Fed's comments, Friday's US non-farm payrolls data (NFP) also became an important catalyst for gold traders as the market looked for consolidation amid last month's disappointment. If the overall US employment data show positive data, traders may have additional reason to expect the Fed to take action at the upcoming Federal Open Market Committee (FOMC), which could support the dollar and lower gold prices.

It is worth noting that the weak dollar may give gold buyers hope, but investors should keep a close eye on Treasury yields to determine the recent trend, as the main bond market fell on Monday. this could provide a positive start for the gold market.

Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.

JRFX is an online CFD broker providing more than 50 products for Forex, metals and commodities. Open a trading account within a minute. Deposit 100USD and download our MT4 trading platform now!