Gold prices are soaring, and most of this momentum is mainly because of the weakness in the dollar index. So far, we have not had anything hawkish from the Federal Reserve, and it seems like that the Fed is still not worried about inflation as they see this factor as transitory.
However, traders are largely concerned about inflation, and for them, there is no other better hedge for inflation than gold. It is also intriguing when it comes to the gold price that any improvement in the economic data isn’t bringing any significant retracement in the gold price.
For instance, yesterday, we saw really decent US confidence numbers, but that data failed to push the dollar index higher. Having said that, the gold price is likely to see some retracement as the price is sitting at four and half a month, and this may trigger some profit-taking among some investors.
On the technical side, the gold price is still looking highly bullish. The price is trading above the 50, 100, and 200-day simple moving averages daily, which means that the bulls are in strong control of the price. The immediate resistance for the gold price could be near the 1915 to 1920 price level. As for the RSI, it is clearly showing that the price is way overbought, and it is highly likely that we may see some retracement.
