July 9, 2020
AliExpress WW
Bank of America maintains gold at a record high this year due to rising precious metal prices

Bank of America maintains gold at a record high this year due to rising precious metal prices

AliExpress WW

Gold has continued to rise recently, as the resumption of coronavirus cases, especially in the US, has undermined some investor optimism about the speed of recovery after the pandemic.

AliExpress WW

Spot gold rose slightly to $ 1,763 per troy ounce by Thursday afternoon on European trading day, compared with $ 1,779.06 reached Wednesday at the beginning, the highest level since early October 2012.

However, the price of the precious metal has risen by about 16% since the beginning of the year, and analysts see the ongoing widespread rally as the growing uncertainty about the virus and the resumption of tension in world trade.

FICC Bank of America chief technical strategist Paul Ciana said the upward trend in gold prices next week should test 2012 highs of 1,790–1,805 ounces. If it overcomes the expected resistance of $ 1,800, the bullion will then aim at a historic high of $ 1920.70 reached in 2011, Ciana said in a note on Wednesday.

“The breakthrough that is taking place now, ending in the second quarter, is completing the eight-week trading range, which has resumed growth,” Xian explained.

“The breakthrough of the range is aimed at 1900, while the continuation at the level of the head and shoulders is confirmed in April, aimed at 1947. These models say that gold can reach a new historical maximum (in the second half of 2020) with our third quarter.”

Siana suggested that the wave leading the price of gold at $ 2,000 is already on, with a growth scenario of $ 2,114 – $ 2,296.

The United States reported a record daily increase in new cases of coronavirus on Wednesday with 45,457 diagnoses after states reopened their economies in recent weeks.

Worsening concerns about the global resurgence of the virus is an outbreak of tension in international trade. A U.S. trade representative notice on Tuesday evening revealed that the Trump administration is considering new tariffs of up to 100% on exports of $ 3.1 billion from France, Germany, Spain and the UK.

The White House also continued to adhere to a hostile attitude towards China, when trade adviser Peter Navarro earlier this week returned to comments suggesting that the US-China trade deal had been “completed.”

“Falling sentiment remains a risk, but given that US rates are tied to ZLB (zero lower bound), Covid-19 reopens risks, brings back trade rhetoric and US elections around the corner, we would prefer that sentiment be much more optimistic after the risks disappear consider yourself the opposite, “said Siana.

HYCM chief currency analyst Giles Coglan told CNBC on Thursday that private banks are encouraging their high-income clients to place gold in their portfolio, which “means that not everyone is sure that we have entered into a post-pandemic market recovery.”

Coglan suggested that fears of an upsurge in infections could lead to major indexes returning to the bear market and a few weeks of volatile trading ahead.

“In the medium term, gold should grow along with silver, but recent growth may be limited by correction,” he said.

Coglan acknowledged that any major sales in the stock markets could lead to short-term gold weakness, but suggested that the $ 1680 region for XAU / USD “should provide good support to buyers to resume their long positions.”

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