Gold continues to consolidate after having retraced to local highs earlier this week. At the time of writing, the precious metal was trading at $1,891.80 on Friday morning, May 28, and could hover in the range of $1,888-1,900 over the short term.
EURUSD has not strayed far from the 1.22 handle, while maintaining a fundamentally weak position, thus putting gold on the front foot. That said, global investors’ need for gold as a safe haven asset has diminished considerably, while the frenzied volatility seen earlier in the cryptocurrency sector has also abated.
Industrial demand for precious metals remains limited as global economies are recovering at a subdued pace. This situation is holding back the formation of a strong long-term uptrend in gold, although overall its outlook remains favorable with the possibility of a leg up to $1,950/oz still in the cards.