leading global broker that has recently launched an upgraded FBS app,
projects gold price surge to $2,800 per ounce by the close of 2024. FBS
financial market analysts have identified the pivotal factors driving the
bullish trend for gold and covered the potential strategies for CFD traders.
Gold is
among the assets characterized by stability and resilience in the financial
markets, making it an appealing instrument for investors. FBS analysts foresee
an upward trend for gold in Q2 and on until the end of the year. They associate
the bullish tendency with significant central bank buying, continued
inflationary pressures in the global economy, and increased demand for gold
from non-institutional investors.
Central
banks worldwide are actively fortifying their gold reserves, signaling a
strategic shift towards safer assets in the context of escalating geopolitical
tensions. FBS financial market analysts point out that hedging and
diversification of reserves has recently become typical of the People’s Bank of
China, the Monetary Authority of Singapore, the Reserve Bank of India, the
Central Bank of Turkey, and others.
Inflationary
pressures stemming from aftershocks of the global pandemic, military conflicts,
rising oil prices, and complications within prominent maritime trade routes
push gold prices further. According to FBS analysts, inflationary pressures are
increasing the attractiveness of gold as a hedge against currency devaluation
and declining purchasing power.
Non-institutional
investors are increasingly gravitating towards gold as a store of value and a
means of portfolio diversification. Total gold demand, including
over-the-counter markets, surged to historic highs in 2023, fueled by economic
uncertainty and evolving investment preferences, particularly in China.
Another
critical factor affecting the increased demand for gold is the interest of
non-institutional investors. Financial markets analysts from FBS indicate that
the total gold demand, including OTC markets, reached a new annual record in
2023 at approximately 4,899 tons. FBS analysts suggest taking a closer look at
China’s gold market, which is experiencing a noticeable surge in demand, to
understand the current trend better.
Looking
closely at the XAUUSD trajectory in the weekly timeframe, FBS analysts
underscore a bullish trend. Gold has updated its ATH, and the price is actively
testing the $2,400 resistance, corresponding to 161.8 Fibonacci. If XAUUSD
manages to break this level, investors can expect gold to rise further to
$2,800, which coincides with the 261.8 Fibonacci level. However, if there is a
correction, the price may fall to the support at $2,200 and then rush up to
$2,800.
Regarding
trading strategies, FBS’s experts stress the importance of prudent risk
management amidst bullish market conditions. Strategies such as controlling
position sizes, limiting trade deposits to 2-10% of the total portfolio, and
employing stop-loss orders are recommended to safeguard capital and encourage
diversification. These actions can be easily performed at the enhanced FBS app, which
allows traders to seize market opportunities on the go, anytime. Additionally,
FBS analysts recommend aligning with the prevailing market trend and utilizing
technical analysis tools like moving averages, RSI, and MACD.
Disclaimer:
This material does not constitute a call to trade, trading advice, or
recommendation and is intended for informational purposes only.
This article was written by FL Contributors at www.forexlive.com.