Gold: Significant upside – ANZ

FXStreet Team FXStreet

Analysts at ANZ Research see significant upside for the gold price, despite it having rallied more than 8% this year on the weakening macro backdrop. XAU/USD is trading at 1585.80.

Key quotes

“Even with inflation expectations likely to drop sharply in coming months, lower bond yields and a weaker USD should see gold’s valuation push higher. In fact, we see significant upside to gold prices if the economic turmoil continues to increase.”

“Technically it looks stable. The Relative Strength Index (RSI) currently sits at 54, well below overbought territory of 70.”

“We believe the fundamentals should be supportive enough to limit the losses in any technically based sell-off.

“We have upgraded our price forecast, with the year-end target rising to USD1,750/oz. However, we see a high probability of USD2,000/oz in Q2. This will depend on the extent of the pandemic and its economic implications.”

Author

FXStreet Team

FXStreet

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.