According to analysts, gold will attack the psychologically important level again - $ 2,000 per ounce, in September. There is a high possibility that this will be overcome, followed by new opportunities for growth that will open up for the precious metal.
The current week was not very positive for the gold. Yesterday, its price continued to decline, reaching $ 1930 per ounce. Today, the XAU/USD pair rose slightly, trading near $ 1938 - $ 1939, however, the "solar" metal failed to go beyond the current range.
According to analysts, the quotes of gold will remain under pressure due to the long-term strengthening of the US currency. It can be recalled that gold is the dollar's rival. It clearly fell when the USD strengthened. But in case that the US currency weakens, gold increases its potential and actively rises in price.
Moreover, experts consider the volatility of the US stock market to be another risk factor for the gold. The principle of seasonality applies here: every year from the beginning of September to the middle of November, the so-called "storm season" lasts on the US stock market. This is a period of frequent collapses, which have a very negative impact on the gold quotes.
In connection to this, market experts fear that the quotes of gold will decline against the backdrop of the dollar's reversal towards the fall, signs of which have already appeared on the range. At the same time, experts are confident that this decline in the price of gold will be temporary and insignificant. The real danger may come from the US presidential elections, which are scheduled for November 3, 2020.
According to analysts, the specifics of the upcoming elections are such that any candidate participating in the presidential race (Donald Trump, Joe Biden, etc.) will refuse to admit defeat if he loses. If such a scenario is implemented, the country will be swept by a political wave, which will immediately transform into the strongest volatility in the markets. In such a situation, analysts are sure that gold will be under strong economic pressure.
At present, experts consider the range of $1900 - 1920 per ounce to be a strong level of support for gold. It can be noted that nine years ago, these indicators were considered strong resistance levels. At the moment, they serve as an intermediate step to new peaks, in particular to $ 2000 per ounce and above.
Many investors in the precious metals market are interested in the timing and scale of the next tranche of financial assistance in the United States, which can be provided by the monetary authorities. The additional cash injection is expected to increase consumer demand in the country.
Earlier, Steven Mnuchin, the US Treasury Secretary, made a request to the US Congress. According to the politician, additional funds are needed to effectively fight the consequences of the COVID-19. The official also announced his readiness to resume negotiations with the leaders of the Democratic Party. According to experts, gold will receive an additional impulse for growth if a new stream of liquidity is injected into the economy.