11/12/2021

This precious metal is finally moving upward after months of failed rallies and lots of ranging even when inflation and interest rate news was being discussed in the summer. Gold is around 1.89% higher than July highs and could be looking to test June highs of $1916.

Our outlook

Investors have not really been pricing in the inflation fears until recently in the past couple weeks. As a hedge against inflation, gold and crypto have the potential to serve as valuable assets in the coming year while the dollar declines. One thing to watch for is whether the Fed decides to hike rates sooner or later than expected. But, it looks likely that investors could be trying to get back into the metal as the year comes to the last couple months. And this could potentially be enough to take price to the $1900s. $2000s in 2021 would have to mean a serious surge in demand which isn't impossible, but would probably require some severe weakness in the dollar. This is why I think $2000 seems like a price gold could reach in 2022 with inflation eating away at the dollar.

Trade Setups

XAUUSD

$1838 is the key level of support gold can come back down to if this current level of resistance around $1860s. If price is able to break above resistance, we could see a continued run to the $1900s. The metal is significantly above both the 200 and 50 DMA on the 1D chart which could mean the pair is over-stretched, but if price continues with this kind of momentum, it could potentially take the 50 over the 200 and form a golden cross.