Gold price has recorded its first weekly decline in three weeks
COVID 19 cases in the US continue to rise, while Europe is not doing any better with this pandemic
As long as the gold price is above 1800 dollars, this precious metal is in the “buy” zone
Gold has seen its first weekly decline in three weeks, closing the week below $1900, but gold is still in a bull market as the COVID 19 pandemic continues to dominate the financial markets.
Fundamental analysis: US economic stimulus programs and the upcoming presidential elections are the focus of investors
The attention of investors is currently focused on the negotiations on the US economic stimulus package and the upcoming presidential elections. Democrats and Republicans seemed to agree on a U.S. stimulus package before election day, even though coronavirus cases continue to rise and the recovery of the labor market is stalling.
According to some analysts, gold is still overbought, and public sentiment towards this precious metal has become greedy and euphoric. The price of this precious metal is currently below the $1900 level, but the mood for gold remains bullish in the long run.
The weakness of the US dollar and the low US Treasury yields could help this precious metal to rise above the $1900 level again, but investors trading gold should be a little more cautious. At the beginning of the week, risk aversion is likely to prevail, which will have a positive effect on the price of gold.
Gold is considered a safe haven and the price of gold has risen in the wake of the coronavirus crisis as investors look for safer places to invest their money. COVID 19 cases in the US continue to rise, while Europe is not doing any better with this pandemic.
This is certainly not good for the economy, but it could give a further boost to the price of gold. It is expected that the gold price will continue to be supported and could even accelerate in October of this year if the dollar continues to weaken.
Technical analysis: Gold price remains in the “buy” zone
This precious metal has weakened in the last week of trading and the current price is around $1898.
Data source: tradingview.com
The current resistance levels are $1950 and $2000, $1850 and $1 800 represent the current support levels. If the price jumps above $1950 it would be a signal to buy gold and we have the open path to $2000.
A rise above $2,000 supports the continuation of the upward trend and the next price target could be around $2,200. On the other hand, if the price falls below $1800, this would be a strong “sell” signal and we have the open path to $1,700.
Summary
Gold continued its correction from the record highs of over $2,070 recorded in the first week of August. Nevertheless, there is no reason to panic and as long as the gold price remains above $1,800, this precious metal is in the “buy” zone. Investor attention is currently focused on the negotiations of the US stimulus package and the upcoming presidential elections.
