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

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

2020-07-09 • Updated

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

How Will China’s Regulation Affect Oil?
How Will China’s Regulation Affect Oil?

China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.

The Oil Market in the Month of June
The Oil Market in the Month of June

Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.

Oil Market Outlook
Oil Market Outlook

Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.

Latest news

Gold is Rising Despite Inflation Returns
Gold is Rising Despite Inflation Returns

Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.

Can the Chinese Economy Recover?
Can the Chinese Economy Recover?

Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.

Deposit with your local payment systems

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

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!

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