Chart of the Day: Spot Gold (28/07/2020) | alb.com
Gold has been in a bullish uptrend closing above the all-time September 2011 high at 1920.80. During the European session it achieved a high of 1981.02 before pulling back which could merely be to profit taking. There are a number of factors contributing to this. A weakened US Dollar, the impending deadline in which the Republicans and the Democrats at the U.S. Congress must reach an agreement with regards extending the unemployment benefit for the 30 million unemployed. The Republican proposed a stimulus package on Monday for $1 trillion whilst the Democrats seeks a stimulus package in the region of $3.5 trillion. Better than expected German IFO Business Climate numbers could be signaling improvements for the region as a whole which will further add pressure on the U.S. Dollar. The U.S. Dollar is currently finding support at 93.412 level. Should this level hold as it did in 16th September 2018, we could see the U.S. move higher. However, a close below 93.412, provides the expectation of it achieving 90.969 which inversely sees the price of gold move higher. There is also the concern of having to reinstate lock down measures as certain states within the U.S. continue to report cases of coronavirus infections. Hence, there are a lot of factors causing uncertainty and as companies release the earnings for Q2, it is very likely, that the volatility will continue.
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