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Gold Expected to Be in Bullish Trend after the New $1860 Breakout

22 July 2020

Yellow metal on Wednesday reaches a new level of price of $1865 per troy ounce. Gold rise to its highest since September 2011, propelled by a softer U.S. Dollar and expectation of more stimulus measures to resuscitate pandemic-hit economies, which could stoke inflation. Gold on Wednesday is volatile with the lowest of $1840.561 and the highest target price of $1865.538. Over 24 hours, yellow metal jumped 0.9% and reached $1860. This breaks out open the gate for gold to hit a new target of $1900 per troy ounce. 

From a fundamental perspective, investors and traders have an impression that gold might be moving forward to hit $1900 per troy ounce even before the end of 2020. Coronavirus cases continue to escalate around the world, more specifically in the United States. President Donald Trump has warned the U.S. pandemic may "get worse before it gets better", as he revived his virus briefings with a more scripted tone. On the same time, the U.S. Dollar has dropped as the world is looking a little bit better. The Interest rates have fallen across the yield curve. This is can be another reason for helping the gold price to grow up. 

From a technical point of view, according to Fibonacci extensions, the expected target of gold is $1920, which is considered the fourth level wave, after breakout the third wave of $1807 per troy ounce. Between 2012-2015, the yellow metal was a bearish trend, with the lowest level of $1040 per troy ounce following by improvement reversion from 2016-2019. Since March 2020 gold goes up gradually. While the RSI indicator is flattening slightly below the overbought zone, the $1865 per troy ounce was a resistance point and might be converted to be strong support, which provides an extra clue of upcoming bullish trend to test the next psychological resistance at $1900 per troy ounce. Other metals have affected positively. Both silver and palladium have gained on Wednesday trading. Silver rose 5.32% and reach highest level of $22.703 per troy ounce. Same goes on palladium, gain 0.06% and current position of $2193.80 per troy ounce.


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Everything posted herein is the Personal Opinion of the Author(s) and does not represent a statement made by TeleTrade. TeleTrade is providing this for informational purposes.

Hussain Shabbir

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