Gold Price Forecast: Is It A Good Idea To Buy Above Double Bottom $1,785?

During Thursday’s Asian trading session, the yellow metal price failed to stop its previous three consecutive days of a downward rally. Thus, it dropped to a near two-week low of around 1,788.44. The yellow metal came under a fresh round of selling pressure due to a stronger greenback and a hawkish Fed member’s stance. The gold price forecast remains bullish above a double bottom support level of 1,784 today.

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The Stronger US Dollar Continues To Weigh On Gold

The US dollar was strengthened by the market’s downbeat sentiment and climbed to one-week highs. This, in turn, was seen as one of the critical factors that acted as a headwind for dollar-denominated commodities and prompted fresh selling on the day. 

Alternatively, the ongoing market risk-off sentiment, triggered by the persistent coronavirus risk, uneven global economic recovery, and cautious stance of major central banks, could help bullion prices limit their deeper losses. 

The Fed’s tapering chatter and economic fears amid Covid-19 further bolstered gold’s bearish bias. This may give further help to gold prices to cap their losses. The gold price is trading at 1,790.44 and consolidating in the range between 1,802 – 1,784. For the moment, traders seem cautious about placing any strong positions ahead of the European Central Bank  (ECB) ‘s latest policy decision.

Risk-Off Sentiment Triggered Amid Covid-19 Fear & Stimulus Chatters

The global equity market failed to stop its previous long downward performance. It remained depressed as investors are worried about the combination of slowing global growth and the potential tapering of central bank stimulus. 

Meanwhile, the escalating Delta COVID variant concerns raise doubts over the global economic recovery. It’s putting further downside pressure on the market’s trading sentiment. Moreover, it’s evident from a weaker tone around the equity markets and extended some support to the traditional safe-haven US dollar.

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