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Fernando Palmer

Gold

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Hello, I would like to see an independent analysis of Gold prices recently? What is the likeliest outcome for Gold before the end of this month?

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Hi Fernando, thanks for coming here. 

As you have probably seen in the media, Gold prices hit a fresh 7-year high on Friday, as the investors fear the escalation in tensions between the US - China. The buyers forced a price action to trade above $1,760 for the first time since 2013.  

"The outlook is positive for next week. Trade conflicts have resurfaced and pressure on [the] Fed is building to bring rates below zero. On the other side Donald Trump has spoken for [a] strong dollar,"  said Jigar Trivedi, research analyst at Anand Rathi Shares. 

Therefore, I'd say that gold is still a “buy the dip” trade. Any pullback to $1,700 - $1,750 is likely to be seen as an opportunity to get on the long side. Looking in the short-term, the $1,770 is a key intraweekly resistance and a place where the 127.2% Fibonacci extension sits. 

A break above this level opens the door $1,805 which is the next level of interest for the buyers. 


 

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Hi Fernando, thanks for the question.

Although your question was posted a month ago, I believe that Gold analysis has no time-relevancy, therefore I will offer my 2 cents below. 

In the past two weeks, gold prices gained more than 5% after printing a 6-week low near the $1,670 mark on June 05. The latest bullishness can be attributed to the low real interest rates, currency debasement concerns and the surge in COVID-19 infection cases, which has placed fresh doubts over a quick global recovery.

“Could a rise in new infections force advanced economies to re-impose lockdowns that are so harsh and widespread that they would shatter confidence and disrupt the nascent economic rebound? Four months after the virus started to hit Europe badly, that remains the key risk to watch for the economic outlook as well as for financial markets,” said Holger Schmieding, chief economist at Berenberg.

Banks have also been bullish on gold in the past few weeks. Most importantly, Goldman Sachs updated its prediction on gold to $2,000 in the next 12 months, again citing currency debasement as the main reason. 

“Policy uncertainty aside, we believe that debasement fears remain the key driver of gold prices in a post-crisis environment such as this. As we have argued in the past, gold investment demand tends to grow into the early stage of the economic recovery, driven by continued debasement concerns and lower real rates. Simultaneously, we see a material comeback from emerging market consumer demand boosted by easing of lockdowns and a weaker dollar,” Goldman’s analysts said.

This comes after the Bank of America famously upgraded the gold target for this year from $1,000 to $3,000 in March. 

Technically, the price action broke above the ascending triangle, which is a bullish continuation pattern that signals a likely continuation of the overall uptrend. The calculated target for this pattern, which has been activated following a move above $1,750, is $1,820. Before that, the buyers would need to clear the 8-year high at $1,765 first.

I hope you found my answer helpful.

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Hello Fernando, thanks for joining us here.

Gold spot prices climbed above $1,800 per ounce on Tuesday, for the first time since 2011 and remained above that level so far.

With the surge in the number of new coronavirus cases in some countries, the stock market isn’t doing any good and many of the investors have turned to gold, as they did numerous times in times of economic turmoil. Inflows for exchange-traded funds that track gold have jumped to 655.6 tons, a better result than the full-year rally in 2009.

Investment banking company Goldman Sachs said it expects gold to reach an all-time high during this volatile crisis period. The bank said that there’s nothing to stop gold from rising further, with the interest rates being very low and struggling US dollar.

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Hi Fernando,

Gold prices reached a new all-time high today on fears over the economic consequences due to the surge in the number of new coronavirus cases, which boosted demand for gold, a safe-haven investment. Still, gold’s gains were capped thanks to an uptick in USD.

Spot gold advanced to hit a new all-time high of $1,987.95/oz in Asian trade, while U.S. gold futures rose 0.3% to $1,992.10.

“The sentiment across markets is deteriorating. First of all, rising infection rates are a real concern for the globe and a real support for gold prices. Given that, it is also driving U.S. dollar higher,” said Michael McCarthy, chief strategist at financial services company CMC Markets.

Gold rose 30% year-to-date but could see a potential correction once it hits the $2,000/oz mark.
 

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