Gold prices may have seemed volatile last week, but they've actually been trending steadily higher and are on the verge of a bullish breakout.
And despite another run by the U.S. Dollar Index (DXY) to challenge the 90.50 level - for the fourth time since mid-January - it proved too difficult once again.
In fact, the dollar should have gotten even more help on Friday, as U.S. Federal Reserve Chief Jerome Powell gave his first speech on economic outlook since taking on his new position two months earlier. Powell said labor markets remained tight and that inflation was expected to rebound within the next few months, supporting further rate hikes.
Instead, the dollar backed off, and gold maintained its strength as markets sold off hard once again.
And the outlook for the price of gold is getting even better, as gold could benefit from some seasonal strength on top of the declining dollar.
Here's what moved gold prices last week, plus a look at my updated gold price forecast...
Gold Prices Were Driven Higher by the Falling Dollar
As the new trading week began after the Easter weekend, gold got a great shot in the arm.
China announced that it would impose duties on 128 different U.S. goods. These would include wine, frozen pork, fruits, and nuts, in retaliation for American tariffs on Chinese steel and aluminum. The DXY remained under pressure early in the week, and stocks continued to struggle, allowing gold to rise to $1,342 on Monday.
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Tensions between the two largest national economies, the United States and China, remained heated. The United States then imposed 25% tariffs on 1,300 Chinese industrial technology, transportation, and medical products.
But as trade war fears ebbed, the DXY made another run at 90.50 on Thursday (April 5). Fortunately for gold prices, the DXY was unable to hold that level and retreated to just above 90 on Friday.
Take a look at the DXY's movement over last week, including its jump to its 90.5 resistance level on Thursday and Friday...
The DXY's Friday weakness helped gold regain some of the ground it lost earlier in the week. Gold reached $1,332 by Friday afternoon.
Now that the price of gold is back on a bullish trajectory, I want to show you exactly how much seasonal influence will have on gold over the short term.
Here's my gold price target...
Where the Price of Gold Is Heading Next
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.