The new year has brought new hopes for the growth of the leading metal, despite some contradictions. Analysts said that gold has everything ahead of it: impressive growth, moments of decline and correction, and the continuation of the upward trend.
This morning (January 12), the yellow metal was trading at the level of the previous closing, that is, near $ 1,852 per ounce. According to experts, its current value is affected by the strengthening of the US currency and the risks associated with COVID-19.
Gold has remained in the range of $ 1,850 - $ 1,855 for three consecutive sessions, since it failed to consolidate above the $ 1,900 mark per ounce. Experts consider the dollar's strengthening to be the main factor that limits the growth of the precious metal. According to TD Securities Bank's analysts, the key support level for gold is $ 1,820 per ounce. They are sure that gold's growth is likely to continue upon reaching this level.
At the same time, the US dollar's strengthening is putting serious pressure on the price of gold, which contributes to its depreciation. Nevertheless, experts observed that the yellow metal has been showing high volatility since the new year began. So, TD Securities believes that the bullish trend in the gold market will continue this year. According to their forecasts, a long recovery in the global economy and the profitability of most assets will affect its price. In addition, the yield on government bonds will remain low throughout the year, which can also contribute to its growth.
It should be recalled that gold's highest value was recorded in early August. During this period, gold soared to $ 2069 per ounce. However, there is currently a noticeable decline from record levels, which amounted to 10.5% since 2021 started. If the precious metal further declines to $ 1,800, traders will be able to renew their portfolios with this protective asset to keep their savings from inflation in the long term.
According to analysts calculations, this is considered a smart move, since gold's price is expected to rise. TD Securities is confident that it may rise to $ 2,000 per ounce during this year, due to the fact that it retains its impressive potential to grow.