By Barani Krishnan
Investing.com — Gold got the quarterly standing ovation it had been denied for more than a year as the yellow metal posted at Thursday’s close its best three month return since June 2020.
What remained elusive though was gold longs’ aim of returning to $2,000 an ounce — a target achieved for just four days this month after a gap of 19 months.
“Gold will find major resistance at the $1,970 level, but if that isn’t much of a barrier a clear path to $2,000 could emerge,” said Craig Erlam, analyst at online trading platform OANDA. The precious metal, which acts as a hedge against both political and economic troubles, should remain “headline-driven,” especially on the Russia-Ukraine conflict, he added.
In Thursday’s trade, the most-active gold futures contract on New York’s Comex, , settled up $15.70, or 0.8%, at $1,949.20 an ounce. For March, it rose 2.6% while for the first quarter, it gained 6.6%.
The last time Comex gained more for a quarter was in Q2 2020 when it rose 14%.
This month, gold rallied to above $2,000 between March 7 and 11, at the height of geopolitical tensions that gripped markets after Russia’s Feb. 24 invasion of Ukraine. Over the four-day span, it reached a 19-month high of $2,077.40.
Inflation has been one of the biggest propelling factors for gold prices this year.
U.S. price pressures, as measured by the Consumer Price Index, or CPI, grew 7.0% in 2021, and 7.9% during the year to February — both at their fastest in four decades. The CPI’s expansion outpaces economic growth at 5.7% last year and projected by the Federal Reserve at 2.8% this year.
Even so, Tuesday’s tumble below $1,900 had negative repercussions for gold charts, said Sunil Kumar Dixit, chief technical strategist at skcharting.com.
While gold had come off since from its oversold intraday stochastic position, resistance lines had formed between $1,950 and $1,970, said Dixit.
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