Gold remains in a bull market as the COVID 19 pandemic continues to dominate financial markets
Gold could gain even more if the dollar weakens further
If the price jumps above $2000, this would be a confirmation of the “bullish” trend
The price of gold has risen above $1960 in the last week of trading and the current price is around $1950. The gold price continues to be on an upward trend as the COVID 19 pandemic continues to dominate the financial markets.
Fundamental analysis: The gold price scenario could be even better
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. Risk aversion is likely to prevail at the beginning of the next trading week, which is positive for the gold price.
Joe Biden won the presidential election in his native Pennsylvania on Saturday and will be 46th in the country. 290 voters voted for him, which is more than enough to win the White House and deny President Trump a second term.
Donald Trump said there is evidence of fraud in several of the key states to be presented to the courts, but political analysts say this will not change anything. Investor attention is currently focused on the negotiations on the U.S. stimulus package and the situation related to the COVID 19 pandemic.
COVID-19 cases in the USA continue to increase, while Europe is not doing any better with this pandemic. The US reported more than 100,000 new cases in one day, and the pandemic brought US hospitals to the brink of capacity.
This is certainly not good for the economy, but it could push the price of gold even higher. According to some analysts, gold is currently overbought, and public sentiment towards this precious metal has become greedy and euphoric.
Nevertheless, the scenario for the gold price could be even better, as the “pigeon-eyed” decision of the US Federal Reserve continues to put pressure on the US dollar. It is expected that the gold price will continue to be supported and could even accelerate in November of this year if the dollar continues to weaken.
Technical Analysis: Bulls focus on breaking the $2000 resistance level
The gold price has continued its upward trend and it is expected that investors trading gold will be more active in the coming weeks.
Data source: tradingview.com
The current resistance levels are $2000 and $2100, $1900 and $1800 represent the current support levels. If the price jumps above $2000, it would be a signal to buy gold and we have the open path to $2100.
A rise above $2100 supports the continuation of the upward trend and the next price target could be around $2300. If the price on the other side falls below $900, this would be a “sell” signal and we have the open path to $1800.
Gold ended the week below the $2000 level, but the weakness of the dollar and low US Treasury yields could help this precious metal to get back above this level. Should the price jump above the $2000 mark, this would confirm the “bullish” trend and open the way to $2050 or even $2100.