Are Gold Prices Going Up?
Gold prices are likely to continue their upward journey as investors know that the gold price has broken significant resistance. This resistance level, formed in 2011, reached an all-time high at $1921. As of today, the gold price is trading at $1943 and has reached as far as $1981. The gold price is up nearly 28% YTD.
Longest Winning Streak
Gold prices have recorded the longest monthly winning streak since 2012. The gold chart below shows that the gold price has recorded four consecutive months of gains. We have not seen this kind of momentum since 2012.
How High Can Gold Go?
Gold investors know that gold price has strong momentum. For them, the current rally is only the beginning. With a global dovish monetary policy and the central bank running their money printing machine at full pace, investors hope that the gold price will continue its rally until it touches $3,000 an ounce.
From the outset, this may seem bizarre, but with a loose monetary policy in place and a significant stock market crash hiding behind closed doors, the gold price will likely continue its run.
The Federal Reserve concludes its monetary policy meeting on Wednesday. It is widely anticipated that the Fed will maintain its dovish monetary policy tone, meaning that interest rates will likely remain at current levels for an extended time.
In addition, there are strong expectations that the Fed will conclude their meeting on a dovish note. This may bring more weakness in the dollar price index, which could be more favorable for the gold price.
What Is Driving Gold Prices Higher?
Moving away from the Federal Reserve, gold prices have been supported due to the rising geopolitical tensions between the U.S. and China. These tensions could continue to escalate if China doesn’t honor its phase-one trade agreement that hasn’t come in the spotlight yet.
China bought only 23% of the total purchase target of goods from the U.S. during the first half of this year. If Beijing doesn’t pick up it’s buying in the second half; the phase one trade deal agreement is likely to upset Donald Trump.
By Naeem Aslam Contributor, Jul 28, 2020, at 02:48 a.m.