Over the last week, the gold price has bounced back above the $1,200 threshold. With the metal currently trading at $1,251, it's set to post a weekly gain of 1.7%.
The price of gold's rally this week to its highest level since June 23 came mostly on the back of comments from Mario Draghi, president of the European Central Bank (ECB). Draghi said during the bank's policy meeting on Thursday that the ECB had not yet formalized plans to roll back monetary policy stimulus.
The Bank of Japan (BoJ) also said its inflation expectations were not meeting targets, with the current 1.1% inflation rate below the previous forecast of 1.4%. The BoJ noted that a dovish monetary policy would persist for some time.
And that echoed what U.S. Federal Reserve Chair Janet Yellen said in her Congressional testimony last week, when she admitted the global inflation slowdown could call for an "adjustment" to the Fed's policy.
Meanwhile, the U.S. Dollar Index (DXY) has declined 104 basis points over the last week, from 95.15 to 94.11. With that decline, the DXY has lost 8% so far this year.
So right now, considering the 1.9% rally over the last week, it's clear that the recent $1,210 low for gold prices on July 7 have become the metal's bottom. That means gold has nowhere to go from here but up.
I'll tell you exactly how high I see the gold price heading in 2017 in a bit, but first, let's take a closer look at its strength since last Friday…
Gold Price Set to Post a Weekly Gain of 1.7% (July 14-21)
After settling at $1,228 on Friday, July 14, gold prices opened higher on Monday, July 17, at $1,234. After some choppy trading in a narrow range throughout the day, the metal finally closed at that same opening level for a 0.5% gain over Friday's price.
By late Monday, the DXY traded below 95 for the first time since Sept. 8, 2016, reinforcing its clear downtrend. That was great for the price of gold, which opened higher at $1,238 on Tuesday. It steadied higher throughout the session and closed 0.6% higher at $1,242.
Here's a look at the DXY's action over the last week…
Wednesday was the only down day, with the gold price opening just below the previous day at $1,241. After peaking at $1,243 early that morning, it fell to settle one dollar lower at $1,241 for a mild 0.1% loss.
Then on Thursday, July 20, as a result of Draghi's dovish comments, the DXY sold off 104 basis points, going from 95.16 to 94.12 in just three hours. This boosted gold prices during the session, with the metal ultimately closing 0.2% higher at $1,244.
And the gold price today (Friday, July 21) continues to rise higher, up 0.5% and trading at $1,251. With that, gold is on track to post a weekly rise of 1.7%.
This week's gains mark a change in sentiment for gold. Now that prices are up 3.4% from the July 7 bottom of $1,210, I think that momentum is poised to continue through the second half of 2017.
That's why I see the price of gold reaching these higher targets by the end of the year…
My Bullish Gold Price Prediction for the Rest of 2017
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.