The gold market is stagnant, but it shows a good signal.

The gold market was hampered last week and did not move higher, consolidating around $1730 an ounce.

Eugen Weinberg, an analyst at (Commerzbank), a German commercial bank, said that the bearish factors that usually weigh on gold, such as higher US stocks and a strong dollar, do not seem to be putting much pressure on gold at the moment.

Daniel Pavilonis, a senior commodities broker at RJO Futures, said the overall market mood was much worse than it was in August last year, but it was actually a good sign.

"it may be time for everyone to increase their holdings of gold. Gold prices are likely to rise this week."

The gold market is now affected by two factors, on the one hand, higher short-term market risk sentiment, boosted by vaccines and expectations of economic recovery. On the other hand, the market risk aversion will be heightened by the long-term low risk sentiment, global uncertainties and the loose Federal Reserve.

Bart Melek, head of global strategy at (TD Securities) at TD Securities, said it was surprising that there had been no upward breakthrough in gold prices.

"the dollar continues to be strong and much of Europe is closed again, so this performance of the dollar will continue and money will flow into US assets."

However, Melek points out that in the long run, the whole market is still full of uncertainty.

"We expect gold prices to break through the $1900 / oz level by the end of the year, inflation will pick up and Fed policy will not change. And debt continues to be high, as well as massive infrastructure spending. "

However, some analysts point out that it may be difficult for gold prices to rise sharply before the emergence of new catalytic factors.

Standard Chartered Bank (Standard Chartered) precious metals analyst Suki Cooper said that the gold market seems to be more comfortable with the current level, physical demand provides support for the downside, but the macro bullish factors are still lacking.

Pavilonis pointed out that the factor driving the upward breakthrough in gold prices is likely to be the performance of US 10-year Treasury yields. Recently, it is the continuous rise in yields, which suppresses the inability of gold to rise. Once the negative correlation between the two is broken, gold will rise.

"higher yields bring a little bit higher, but gold prices basically hold up, which is a good sign. So the negative correlation between the two may be about to be broken, and U. S. President Joe Biden's infrastructure projects are also good for gold, inflation is coming, it is time to buy gold. "

Pavilonis believes that the longer gold prices consolidate, the less resistance to the upside will become.

Standard Chartered's Cooper said the dollar's eventual loss of momentum could be another driver of gold's upside.

"the dollar will eventually return to the downward trend, real interest rates will continue to be negative, and the upward action in gold prices will return."

Han Tan, a market analyst at FXTM, also said that various uncertainties in the market are increasing and investors' risk demand will be suppressed.