Gold could test new highs again this year, according to David Lennox of Fat Prophets, who said he sees “a fairly big tick” ahead for prices of the precious metal. Gold prices have been mixed in so far this year. Since the start of 2021, spot gold has gained about 0.66% — clawing back some gains after a March stumble that saw prices drop below $1,700 per ounce. It is currently trading at around $1,911 an ounce.
Inflation in the U.S. is still very much in the spotlight as the central bank has been keeping the financial system flushed with cash. The Federal Reserve has since last year kept interest rates low and bought up Treasurys, in a bid to stimulate the Covid-hit economy and keep financial markets afloat.
Meanwhile, the dollar is also expected to weaken, and could be another potential tailwind for gold — considered a safe investment asset in times of market uncertainty. Furthermore, the economies of major currencies that trade against the U.S. dollar are in some instances doing better than the U.S., he said without elaborating.
Source: FXPro