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Could Gold Hit $1,800?

by Apr 29, 2020Market Reviews

Could Gold Hit $1,800?

 

Gold is back on the upside, trading at $1,710/oz after a 3 day losing streak as the US Dollar weakens. After hitting a peak at $1,731, gold lost some of its momentum, but is now looking to repeat its pattern from a few weeks ago. The yellow metal has been making sharp gains since the start of the month, rising to hit $1,725 before experiencing a short sell-off due to being gatekept by the strength of the US Dollar, as well as the shortage of physical gold in New York. However, that was short lived as gold was able to surpass its previous high in just a matter of days. Therefore, this current price can be seen as simply a repeat of its previous movements, as evidenced by the fact that it is moving to the upside once more, albeit slowly. 

On a monthly timeframe, gold is nearing the $1,750 resistance level that it crossed back in late 2012, as seen in the chart below.

This is the next big step for gold, and if it breaks $1,750 definitively, it is then also not unreasonable to suggest that it could reach $1,800/oz in a matter of months. Back in March, Goldman Sachs predicted that gold would reach $1,800 in the next 12-24 months. Now an $1,800/oz figure is looking possible before the end of the year. A breakthrough of this resistance level would prove that appetite for gold is still strong, and that a strong US Dollar is still not enough to curtail the strength of this safe haven. 

Factors currently pushing down demand for the USD include stock futures rising, increasing risk appetite slightly. Other currencies have also picked up strength, such as the Japanese Yen, which is currently trading at a 6 week high against the greenback, as well as both the Aussie and Kiwi Dollars rising as well, as detailed in my post yesterday. 

No matter what happens, it would be wise to continue to keep tabs on gold as the economic situation progresses. 

 

Anish Lal here at BlackBull Markets analysed gold in today’s Trade in 60 seconds video, which you can view below.

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