Gold will decrease by real economic growth
The last two weeks were one of the most critical periods of the 2021 Economic calendar!
Despite the decrease in the last day of the past two weeks, yellow metal increased and closed much higher.
Several reasons caused higher prices in the Gold chart. After the FED meeting, Mr. Powell's dovish stance and tone in his press conference weighed on USD price and was one of the reasons to lift the gold. On the other hand, weaker than expected data in most developed economies, including China, the US, and European countries, confirmed the slower pace in the global economy, increasing the demand for safe havens.
A Reuter's poll of 38 analysts shows the Gold price average for 2021 at $1812 and $1,785 for 2022. For this year, "Gold will average $1,835 an ounce in the third quarter of the year and $1,841 in the fourth quarter."
The main reason for price increase in 2021 can be the expectations and fears from rising inflation. In vice-versa next year in 2022, economic growth becomes more stable, and monetary policy normalized by global central banks should reduce the safe-haven demands.
Technically, if we draw the Fibonacci from a multi-year high of 2,075 to its March low at 1,676, we can see that set in rebound breached the trend line at its 38.2% Fibonacci level at $1,826, which can be the strong signal for the level, where the asset can change the direction. At the same time, we can see the 23.6% at $1,768 is the critical support. As long as asset trading above 23.6% maintains its uptrend, but to stay in a real uptrend and continue the way, we need the numbers above $1,826. On the flip side, the downtrend needs to trade stable under $1,768.