Gold surpassed $1 800. Will it set new record?

Gold surpassed $1 800. Will it set new record?

Yellow metal has become the best performing asset during the coronavirus. Some analysts foresee it will reach $2 000.

Why gold surged so much?

Gold has risen nearly 19% this year amid the market uncertainty caused by the coronavirus outbreak. Actually, it was quite easy to predict as investors searched for a safe place to park their money and, eventually, they have picked gold for this role. They didn’t have so much choice: the US, the JPY and gold itself. Not long ago, the US dollar was the strong rival to the precious metal. However, now the global dominance of the greenback has started waning.  

Moreover, according to HSBC, gold prices had been already high before the virus outbreak, so the coronavirus was just the additional tailwind. In addition, central banks increased the money flow and lowered interest rates to support economy. That gave an additional stimulus to the bullion, as well, because it will be unprofitable to invest in other assets: lower rates – lower returns.

Finally, the current resurgence in US virus cases forced investors to hedge their capital. It is one of the reasons why stocks and gold are rising together, while it should be quite the opposite. People invest in both ways to save yourself from huge losses. If stocks drop, profits from gold trading will offset their losses.

What is long-term forecast?

The gold price has to exceed $1 916 to beat the all-time record. Mr Steel from HSBC believes that uncertainties for the global economic recovery will drive gold prices higher till the end of 2021. His prognosis: “prices could reach $1 845 by the end of this year before falling back to $1 705 in 2021”.  Analysts from Goldman Sachs predict that the yellow metal will surge even higher. The bank set a 12-month target price at $2 000. In April, the Bank of America put a $3 000 price for 18 months.

Technical tips for short term

Gold dropped today after the 6-day rally. Analysts anticipate that it’s just a correction and the gold will continue its way up further. If the price breaks through the support at $1 807, it may fall deeper to the key psychological mark at $1 800. When it manages to reverse and goes up, it may meet the resistance at $1 818. The way up this level will push prices higher.

XAUUSDH4.png

LOG IN

Similar

Latest news

NFP Number Will Drive Markets

US stocks are set to open lower Friday, with investors worry over rising tensions between the US and China, deadlock over the next virus relief bill and possible disappointments from the key monthly employment report.

Deposit with your local payment systems

Learn more

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera