The yellow metal continues its victorious march in the financial market, attracting more and more buyers and maintaining the status of a reliable defensive asset. Experts expect the positive trend of gold to strengthen, despite the appearance of the so-called "death cross" on the technical chart of the precious metal.

The precious metal showed corrective dynamics at the beginning of the new week, recovering from a weekly decline. At the same time, the expectation of aggressive rate hikes by central banks puts serious pressure on gold. The strongest influence factor is the growth of the Federal Reserve's interest rate, experts emphasize. This creates problems for further appreciation of gold in the long term. It should be noted that the investment appeal of the precious metal is manifested precisely in the long planning horizon, and in the short term, profit is unlikely.

The price of gold sharply rose on Tuesday, July 5, staying above $1,810 per 1 troy ounce amid inflation concerns in the markets. In the future, the XAU/USD pair was trading at $1,803.50, showing an upward trend.

However, the short-term recovery of gold is limited to the level of $1,821, experts believe, referring to the so-called "death cross" on the technical chart. Gold's consolidation above the downward trend line, that is, the $1,821 mark, is crucial for the precious metal's further growth. Starting from this level, bulls can expect to reach a "golden" high near $1,841, analysts say.The gold market is currently dominated by buyers who make up the absolute majority (100% of purchases versus 0% of sales). The reason is the desire to save capital amid another global crisis provoked by the weakening of the euro, galloping inflation and the geopolitical conflict in the center of Europe.

Experts consider the current monetary policy of the European Central Bank, which is more flexible than the actions of the Federal Reserve, to be another important factor in the growth of gold. Note that the ECB keeps the key rate unchanged (at zero), although inflation in the eurozone exceeds 8%. At the same time, in the first half of 2022, the Fed managed to raise the interest rate three times, which now stands at 1.58% per annum.

A significant difference in interest rates at comparable inflation rates has increased the attractiveness of the USD against the euro. However, the current situation contributed to the depreciation of the European currency, which is why the price of gold denominated in euros turned out to be higher than in dollars. According to analysts, a possible reversal in interest rates by the ECB will lead to a cheaper yellow metal. However, such a scenario is unlikely, since the ECB, unlike the Fed, is not set up for a decisive fight against inflation.

High inflation is leading among the factors supporting the growth of precious metals. Recall that in unstable times, investors primarily invest in gold, considering it a reliable instrument for hedging inflationary risks. At the same time, the markets remain concerned about the intensification of the recession amid the actions of world central banks related to the increase in interest rates.

According to analysts of the precious metals market, at the moment investments in gold are most appropriate. There are two ways for gold to grow further: a slowdown in the global economy amid excessively aggressive rate hikes, as well as the refusal of global central banks to curb inflation. According to experts, gold is well prepared for any scenario. Experts expect that by the end of summer the precious metal will rise to $2,200 per 1 ounce, and consider this price fair.