Gold price still has legs to inch higher - OCBC

FXStreet reports that strategists at OCBC note that gold price closed above $1900 for the first time since the first week of January. With XAU/USD breaking above the $1900 level, there is a clear bullish momentum with precious metal demand right now, they suggest.

“Gold finally closed above the $1900/oz for the first time since the start of the year, and we think that may herald further bullish momentum for the precious metal.” 

“Prices have been supported by talks of yet another outsized fiscal stimulus from the Biden administration at $6tn for the 2022 fiscal year.”

“A weak Nonfarm payrolls number this Friday may jolt gold prices toward the $1975 level.”

FXStreet notes that oil traded a high of $69.14 last Thursday, recovering all its losses from the prior week, although it slid 0.7% on Friday. This week’s OPEC+ meeting should reaffirm the bloc’s plans to gradually ease production curbs with little probability of surprises. In the absence of any strong catalyst, strategists at OCBC bank expect crude to face stiff resistance at the psychologically important $70 level. 

“A decline in both US crude oil and gasoline inventories – the latter partially a result of the Colonial Pipeline cyber-hacking – proved to be the catalyst in sending oil prices to a new high since the pandemic began.”

“OPEC+ meeting on Tuesday should affirm the bloc’s plan to continue easing production curbs and may prove to be a non-event. Any discussion on the potential return of Iranian crude on international waters will be a bonus.”

“In the absence of any strong catalyst, we expect crude to face stiff resistance at the psychologically important $70 level, which suggests the possibility that oil may head lower this week on technical plays.”