Gold Price News and Forecast: XAU/USD looking for an excuse to go higher
|Gold Price Analysis: XAU/USD fails to scale 50-day SMA even as US inflation expectations rise
Gold, a proven store of value, struggles to gather upside traction despite the uptick in the US inflation expectations. The yellow metal is trading at $1,918 per ounce at press time, having faced rejection above the 50-day simple moving average (SMA) at $1,923 early Thursday. Similarly, the bulls failed to keep gains above the key SMA on Wednesday.
The US 5-year, 5-year forward inflation swap rose to 2.20% on Wednesday, the highest level since the second quarter of 2019. While inflation expectations are hovering well above the Federal Reserve's 2% target, the central bank is unlikely to raise rates anytime soon.
Gold is looking for an excuse to go higher
And that excuse is the devaluation of the dollar. Gold is not immune to fundamental events. However, recently has been sideways for the most part of two months.
A theme revolving around Biden’s win is the dollar’s devaluation, with many banks calling a drop in the dollar if Biden is elected. Given the historical precedent of Gold rallying on dollar weakness, a Biden win may push the yellow metal higher. Furthermore, a sell-off in the equity markets on a Biden win may give Gold’s tailwinds as investors and traders switch to risk-off.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.