Spot Gold with a new all-time high, 2,000 USD – here we come!
Source: Economic Events July 29, 2020 - Admiral Markets' Forex Calendar
Gold started the trading week with a bang, marking a new all-time high and levelling the path to 2,000 USD after Gold Futures also made new all-time highs over the last week of trading.
Today's main focus will certainly be the Fed and its rhetoric. Currently, it seems as if the push higher in precious metals, despite recently solid US economic projections, came mainly in anticipation of the inevitable second economic stimulus from the US government, announced over the last weekend.
The White House and Senate Republicans introduced a 1 trillion USD spending bill on Monday, released in stages, aiming mainly to provide unemployment insurance while further negotiations will take place in the upcoming weeks.
What will be of interest in regards to the Fed, is that on Wednesday the US central bank has already offered an idea of how it plans to act "monetary wise". The latest data shows that the Fed balance sheet stabilises slightly below 7 trillion USD, mainly due to Foreign central bank liquidity swaps continuing to drop while bond purchases from the Fed continued to rise.
Should the Fed now fail to add further fuel in terms of a very dovish rhetoric, Gold could see a sharp correction.
Sentiment-wise, a drop like this wouldn't come as a big surprise since, after the seventh consecutive weekly gain, the returns after 7-week streaks (which took place 11 times since then) were all negative for the upcoming week since the 1980s.
Still, the mid-term outlook for Gold stays positive with us seeing a deep run above 2,000 USD in the months to come, technically on a daily timespan as long as we trade above 1,660 USD:
Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between April 23, 2019, to July 28, 2020). Accessed: July 28, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of Gold fell by 10.4%, in 2016 it increased by 8.1%, in 2017 it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.
Discover the world's #1 multi-asset platform
Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.