On Thursday (February 20th), the spot gold rushed up and fell slightly. At the beginning of the trading session, it hit a 7-year high to 1612.90 US dollars. At present, the high point fell slightly by 5 US dollars, which is now reported at 1507.80 US dollars, a decrease of 0.24%.
On Wednesday, due to market expectations that more stimulus measures will be introduced to offset the impact of economic uncertainty, the U.S. and European stock markets both hit historical highs. At the same time, the U.S. dollar hit its nearly three-year high after the Fed hinted that it would continue to stand still, so gold once fell by nearly 10 US dollars. However, as traders were still betting on the Federal Reserve to cut interest rates, the U.S. dollar fell slightly, and the easing expectations of global central banks also supported the price of gold, so gold rebounded slightly and hit its nearly 7-year high in the Asian session on Thursday.
In general, as gold broke through $ 1600, the market's interest in gold continues to rise, but the strong performance of the US dollar will continue to limit the rise of gold, and the market needs to continue to pay attention to US economic data. Focus on the European Bank's resolution within the day. If the European Central Bank releases a dovish signal, it is expected that the euro-denominated gold will continue to reach a record high.
In a short time, I paid close attention to the monthly closing price of July 1, 2011, which was near 1,625 US dollars. Gold had risen nearly 300 US dollars in the following month after reaching this pip. If the near future, gold is expected to reach the 1650 mark.
U.S. and European stock markets hit historical highs and superimpose U.S. economic data, gold is slightly down but stays above 1600
GoldMining Inc vice president Jeff Wright said that over time, investors will gradually realize that even in the United States, it is not possible to completely avoid the risk of economic downturn, and then the market will flood into the gold market more actively. At that time, gold will become a true safe haven. For the moment, the driving force behind the rise in gold still comes from the current state of global easing and long-term expectations.
Jeff Wright believes that gold will continue to rise in the long term, but in the short and medium term, 1550-1650 may become a new trading range.
Gold Newsletter researcher Brien Lundin pointed out that gold's large head and shoulders reversal graphics theoretical target is 1665 level. Future news about the economic outlook is likely to provide sufficient fundamental support for rising gold prices.
With the recent gold stations at $ 1,600, it has shaken off the previous shock range, suggesting that the market is still buying gold, and some institutions continue to raise their gold price expectations.
Citigroup said it expects gold to hit $ 1,700 over the next 6 to 12 months and $ 2,000 over the next 12 to 24 months.
Citi analyst Morse believes that given the stock market's regular rebound and the dollar's strength, the recent trend in gold illustrates the resilience of gold prices.
Morse said: "Gold has resilience during sustained risk market rebounds and better hedging capabilities during sell-offs and spiked trading volumes."
Considering that investors are paying more and more attention to the direction of economic development, the upcoming US elections and the uncertainties that still exist in international trade, this means that gold may still continue to rise.
Morse points out that gold will also benefit from the economic impact of global public health events, as these risk factors will affect the supply chain, which will affect the profitability of US companies, which in turn will drive gold prices higher. Most importantly, the low interest rate environment supports rising gold prices, and the Fed is more likely to cut interest rates.
"With the short-term interest rate market betting that the Fed will cut interest rates by 1.5 percentage points in 2020, and global economic growth is facing downside risks, gold will also benefit from low and even negative interest rate market conditions," said Morse.
Brian Lundin, editor of Gold Newsletter, shares the same view, saying that the market is in a strange combination of hedging and speculation. The dollar and the stock market are benefiting from inflows of safe-haven funds caused by global public health events, but safe-haven funds are also flowing into gold and silver as investors expect central banks to launch stimulus measures to offset possible economic impact.
Lundin said that at least for now, fear and greed are pushing gold up. Gold may hit a record high of $ 2,000 by the end of 2021.
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