What factors can push gold price to reach 2,000 USD/ounce in the near future?

Gold prices challenged an important threshold last week on the way to $2,000 an ounce, but one of the biggest challenges is a strong dollar, according to analysts.

Despite strong selling in the last trading day of last week, for the whole week, gold price still increased by more than 1.5%. The price of gold for June futures contract delivery last traded at $1,974.6/ounce after surpassing $1,985/ounce the previous day.

After experiencing a very popular period amid escalating geopolitical tensions, the appreciation of the dollar is limiting the price of gold. The USD index surpassed the important psychological level of 100 points on Thursday, the last session it traded at 100.36 points.

“Gold is receiving interest as a safe-haven asset. However, we are seeing a similar trend with the USD. There will certainly be resistances to the price of gold. Investors look to the USD because of the past. There’s been a lot of uncertainty and turmoil that we’ve seen in the market. The same holds true for investors who own gold,” Gainesville Coins precious metals expert Everett Millman told Kitco News.

Another factor that has escalated tensions is Russia’s threat to deploy nuclear weapons and hypersonic missiles if Sweden and Poland join NATO. The latest view was made by the deputy chairman of the Russian Security Council Dmitry Medvedev.

This development comes just a day after US President Joe Biden announced that he would provide Ukraine with about $ 800 million in additional weapons, including many types of heavy weapons.

The growing pressure from a stronger US dollar can make gold price stuck in a certain threshold until the index returns to below 100 points.

Senior market analyst at OANDA fund, Mr. Edward Moya, commented: “The dollar has appreciated quite strongly in recent times. There was a time when many experts believed that the dollar would stop rising at the threshold of 100. That’s why I’m neutral on the gold price outlook. Fundamentals will still support gold prices, but a stronger USD will probably limit the upside.”

Rising US Treasury yields are also supporting the dollar and weighing on gold prices, said Bart Melek, head of strategy at TD Securities.

“The dollar appreciates to some extent when yields on US Treasury bonds increase. Yields on 2-year, 10-year and 30-year US Treasury bonds simultaneously increased, which is an important factor. helping to increase the value of the dollar,” Mr. Melek analyzed.

On the way to the $2,000/ounce mark, gold prices will likely encounter strong resistance at $1,975/ounce, not $2,000/ounce, said Frank Cholly, senior analyst at RJO Futures.

According to Mr. Cholly, the dollar is definitely the most influential factor right now, if the dollar falls to the 99-98 threshold, the gold price will surely pass the threshold of 2,000 USD/ounce, which will eventually happen.

Mr. Millman meanwhile confirmed that the $2,000/ounce threshold could be established within the next month, but investors need to be prepared for unusual ups and downs. The level of fear in the market will help make that scenario happen. However, if there is a solution to the tension in Ukraine or inflation is expected to go down, the gold price can reach the threshold of 1,900 USD/ounce.

The gold market will also pay special attention to policy guidance from central banks around the world, especially the announcement of the Bank of England’s interest rate hike as well as the upcoming Fed meeting in September. May 2022.

The market will continue to consider the tightening process of monetary policy kicked off by the Bank of Canada tightening policy, raising interest rates by 50 basis points on Wednesday.

According to Trung Men