Where are we going with gold? Let's make a step back - or, rather, travel back in time to throw a strategic look at the gold price.
Gold: rules changed
Information is not investment advice
Gold prices tend to rise together with risky assets as investors try to hedge their exposure to stock investments. Indeed, the risk sentiment changes every day, sometimes even during one day. It forced investors to react quickly and switch between risky assets and safe-havens according to the market mood. However, constantly increasing virus cases forced investors to buy gold, as well. Despite successful vaccine tests, there is no still any vaccine. New infections will continue rising and may push gold prices to $2 000. Also, Sino-American tensions may deteriorate the market sentiment and increase the demand for gold. Moreover, yesterday the mixed data from China and the USA showed that the global economic recovery will take a lot of time to reach pre-crisis levels.
Gold fell down significantly yesterday, but today it reversed. XAU/USD rose on the weak US dollar. The greenback, in turn, slumped because of the strong EUR based on the optimism over the EU’ 750-billion-euros recovery fund. Gold is moving upward to $1 810. If it breaks this level, it may surge higher to the resistance at $1 815. Support level are at $1 794 and $1 789. Bulls will remain in control as long as the gold price is above the key support at $1 789.
Futures tracking the S&P 500 index hit a record high on Tuesday as investors shrugged off simmering US-China tensions to bet on a stimulus-led economic recovery from the COVID-19 pandemic.
XAU/USD is decreasing for the third day in a row. What are the reasons?
Russian health ministry has approved coronavirus vaccine developed by Moscow's Gamaleya Institute. He hopes Russia will start mass production of coronavirus vaccine very soon.