Metals, such as gold and silver, arouse much greater interest of investors at a time when panic appears on the stock market. Panic and fear undoubtedly appeared on Monday, which helped in the continuation of gold price rises towards a round level of USD 1,500 per ounce.
Gold has already gained over 15 percent since the beginning of the year, and most of the growth seems to have been due to the trade war between the United States and China. The dispute between the two superpowers intensified, which greatly worsened the sentiment in the markets. This was accompanied by risk aversion and a sharp fall in stock prices - the largest in one day this year.
It was once again fuel for gold price advantage, which again began to act as a safe haven in response to the pressure of stock market. Previously, both gold and stocks were more correlated because both asset classes seemed to gain in value amid Federal Reserve interest rate cuts.
The demand for gold is visible in most currencies, and its price increases not only in the US dollar. Besides, the USD has been the strongest in the last two years, which did not prevent the price of gold to persist on many years' highs. This means that investors may diversify their foreign exchange reserves and exchange them for gold. Just as central banks did last year.
Thus, many points to the fact that the price of gold, which has risen to the highest level for more than six years (in the US dollar), seems to be supported by investors from around the world, which may indicate a possible strong trend.
Gold, weekly chart. Conotoxia trading platform
At the chart, the price of gold has broken from the upper limit in the short-term triangle pattern. Currently, another resistance may be the upper limit in the main, wide channel, which is set over the level of USD 1,500.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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