“Gold Prices Rise Amid US Debt Ceiling Drama: Forecast & Analysis”

Investing.com – The US debt ceiling drama continued to send red signals in favor of gold, helping it close higher at the close on Friday.

Where the Speaker of the House of Representatives, Kevin McCarthy, announced that the White House had retracted the debt ceiling negotiations and that the talk would be postponed until the return of US President, Joe Biden, from his trip to Japan as part of the G7 meetings.

These tensions contributed to spurring a surge in safe havens, led by gold.

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Gold closes higher

The futures rose for June delivery to $ 1979.90 an ounce, up 1.03%. Last week witnessed a sharp fall for gold futures contracts to the lowest point in two months at $1954.40 in Thursday’s session, and gold lost 2% during the past week, despite closing upwards. And the highest number for gold remains at $ 2085.40 an ounce, which was recorded on the fourth of May trading.

As for (Spot), it ended Friday’s trading at $1977.80 an ounce, an increase of 1%, or $20.22, on the last day. Spot prices fell to around 1952.03 in Thursday’s session before rebounding in Friday’s session. Spot contracts fell 1.5% in trading last week. The highest figure for spot contracts remains at $2073.29, which spot contracts achieved on May 4th trading.

Dixit of SKCharting.com said that if gold breaks below $1940 this week, the yellow metal’s bullish trend may be over from a chart perspective.

Gold: price forecast

Commodity analyst Dixit, who predicted gold’s decline last week, said that in order for gold to go up, speculators must meet the 5-week exponential moving average, or exponential moving average, dynamically located at $1,990.

Then move further towards the resistance area towards the daily Bollinger Bands at $2,005.

What if it falls?

He added, “The weekly Bollinger Bands of $1,935 and the 100-day Simple Moving Average of $1,928 are potential support areas if gold falls below $1,949 and the 50% Fibonacci level of $1,942 fails to hold support.”

Gold and the dollar

Dixit pointed out that last week was the second for gold, after it reached record levels at around $2080. He explained, “The decline attracted fewer buyers the second time as gold reached the $1,952 support level, which helped it rebuild the weekly settlement at $1,976.”

To help gold regain its bullish trend, it could drop to 102.85-102.65 and eventually break below 102.55-102.25, 101.90 and 101.70.

Dixit added that sustainability above 103.50 for the index could push it to the next higher leg at 103.96 and 104.45, which complicates gold’s path to the upside.

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