Gold price new lifetime high
Its been a fantastic run for gold price. Spot gold prices made low of 1450$ in March this year. Currently gold prices are trading above 2050$. Up more than 40% from its March’s low. This stupendous rally came just within 4.5 months. Gold is making new lifetime highs almost daily and closing on lifetime highs since last week. So will gold winning streak continue ? Lets find out.
Last week US released its GDP numbers. US GDP contracted nearly 33% first time in 70 years. Currently investors are pumping gold price as we are seeing new records in corona virus almost every day. Gold buyers are looking the tremors of central bank’s frenzy spending. FOMC alone spent more than $2 trillion to support US economy.
Another factor is jobs, people all over the world have lost jobs. Millions of people filed for jobless claims in US alone. ADP Non farm numbers released yesterday which came way below expectations. Soaring jobless numbers and crumbling GDP numbers are pushing gold price even higher.
Dollar Index is also another contributor to gold prices. Greenback fallen nearly 10% from its March’s highs and continuing its free fall despite great recovery in equity markets. Dow Jones & S&P already made almost at pre covid levels and yet dollar index is struggling due to US weaker economy.
Dow Jones & other US indices astonishing recovery suggest corona virus vaccine is just around the corner. Once we see some positive news regarding vaccine there should be a dramatic fall in precious metal prices. But that does not mean gold would conclude its dream run. We need to asses the situation to determine if its time to see gold 400-500$ back or just a minor correction of 100-150$ . For that we need to wait if there is vaccine beyond third phase trial.
Currently gold is trading at 2050$. Weekly support stands at 1920$. This is previous lifetime high which now stands as support. If gold manage to close below this level then we may see major correction in gold prices upto 1800-1600$.
Gold is uncharted territory so its hard to give resistance, however only few setups conclude a resistance at 2076$. If trader breaks and close above 2076$. Then fresh buying may drive gold price till 2105$ – 2200$.
Conclusion: Gold trend is positive and it would continue to remain positive as long as US or other world economy stays in trouble and our support stays intact.
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