FXStreet reports that strategists at UOB Group gave their opinion on the perspective for the precious metal in the next months.

“Since last year, we have maintained a positive outlook for gold due to expectations of “lower for longer” interest rates.”

“Gold has since staged a strong rally over the past month, pushing its way above our quarterly longer term forecast of USD 1,850 / oz by 2Q21. With this latest rally, gold has broken above the previous peak of USD 1,920 in Sep 2011. In terms of technical outlook, we note that “the upward momentum is strong and the focus is at USD 2,000. Next resistance of note above USD 2,000 is around USD 2,040 followed by USD 2,100”.

“Fundamentally, the various positive drivers for gold price, particularly that of the massive central bank easing remain as strong as ever. However, we note that long positioning in gold has become extremely crowded with ETF tonnage rising to yet a new record high. As such, there is now an increasingly speculative element in gold’s price action with larger intra-day swings as traders are positioned for gold to trade above USD 2,000 / oz.”

“Overall, we take this opportunity in the monthly to make an interim upgrade to our gold forecast but warn that with current crowded long positioning, gold may be priced for perfection and will be ripe for profit taking should expectations of near zero interest rates suddenly reverse or financial markets succumb to another round of USD liquidity crunch, similar to what happened in March. Our new forecast for gold is now USD 2,000 / oz for 3Q20, USD 2,100 / oz for 4Q20 and USD 2,200 / oz for 1Q21 and 2Q21.”

FXStreet notes that gold has reached Commerzbank’s target of $1983. Strategists at the bank expect the yellow metal to experience some profit taking as forays above are seen short-lived. On the flip side, the 55-day ma at $1838 is a solid support.

“Gold has reached the top of its 49 year channel at $1983. It represents our long-term target. This should hold the initial test and provoke some profit-taking.”

“Forays above $2000 are expected to remain short-lived. Above $2000 we have a point and figure target of $2030 and a Fibonacci extension to $2088.”

“Support is offered by the 55-day ma at $1838 and the five-month uptrend at $1829. Below 1829 lies the $1765 May high. This guards the $1670 June low.”