Gold Bugs Ride High Amid the Muted U.S DollarThe precious metal rallied high at Monday’s trading session amid the muted greenback and increased cash flows into riskier assets that include crypto-assets boosting the metal’s shine at the first trading session of the month.
It is important to note gold prices posted their highest monthly gain of 2021 in April as it halted a three-month downtrend, despite pullback beneath the $1,800 per ounce price levels.
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Market players would be tracking the dollar strength at least in the near term, as a sudden change the greenback’s narrative could push prices below the $1,725 per ounce levels in a matter of days.
Still, gold traders held their grip on the yellow metal on news that show the world’s largest economy plans to boost government spending via investing more in middle-class families, infrastructure, amid rising inflation and a very dovish U.S Federal Reserve Bank.
Consequently, gold bears are staying on the bench momentarily, despite indicators that reveal the most recent data on U.S. consumer spending ticked up as many families received stimulus support primarily to spur economic growth.
However, the bears seem to tame the odds of the precious metal breaking above $1,800 per ounce at least in the near term, over reports that Robert Kaplan, a key U.S monetary official expects the Apex bank to consider tightening its monetary supply amid the growing imbalances in financial markets, sooner than later.
That being said, gold bugs are riding the price wagon on macros that reveal gold consumption in China surged by about 94% in Q1 year-over-year, discounting earlier bias, that gold is losing the battle to Bitcoin and Ethereum.