Gold Maintains Its Strength as Investors Seek Inflation Protection

The price of gold remains strong, with prices sticking to $2007.00 USD per Troy ounce as of Monday. Last week, the market showed a strong desire to test record scores, with prices hitting local highs. Although the rally temporarily decreased in volume and scale, it may return at any moment.
 
The main support for gold prices is due to market doubts about the stability of the US economy, along with OPEC+'s decision to drop quotas for crude oil production. The weakness of the US dollar has also contributed to lifting gold prices.
 
Investors use gold as insurance against inflation risks, and with uncertainty around whether the US Federal Reserve will continue to raise interest rates, the precious metal is regaining its leadership position.
 
On the H4 timeframe, XAU/USD completed an impulse of decline to 1988.88 and is currently forming a consolidation range above this level. If the price breaks the range upwards, a correction to 2011.11 could begin. On the other hand, if the price breaks the range downwards, a new wave of decline to 1920.00 could develop. This scenario is technically confirmed by the MACD, which shows its signal line above the zero mark and directed downwards to renew the lows.
 

 
On the H1 timeframe, XAU/USD has completed a five-wave structure of decline to 1988.88, and a consolidation range is forming above this level. If the price breaks the range upwards, a correction to 2011.10 could develop. After the correction, the next impulse of decline to 1988.90 could follow. If the quotes break this level, a pathway for a wave to 1954.80 could open. The Stochastic oscillator confirms this scenario, with its signal line above 20 and directed upwards. The line could rise to 80.

 

Overall, the uncertainty in the market surrounding the US economy and the decision by OPEC+ has helped to support gold prices, and the precious metal remains strong in the face of potential economic instability.
 
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.