Nixse
4

Geopolitics could exceptionally support gold prices

The trade tensions between China and the US could push the gold market into crazy territory, analysts say. They think that June is likely to be a very turbulent month for gold. 

Analysts expect more gains for the metal this week. Afshin Nabavi, a senior vice president at MKS SA, stated that all the tensions between China and the US and China and Hong Kong would push gold to the upside. coronavirus

Gold ended the previous week on a high note. Gold futures for August were up by 1.3% trading at $1,751.70 an ounce.

Everett Millman, Gainesville Coins precious metals expert, stated that China is becoming a more significant issue. This further adds to the fear of trading the metal. 

According to Bill Diviney and Arjen van Dijkhuizen, senior economists at ABN Amro, a de-escalation of the trade war between China and the US could deepen the trade tensions between the two largest economies in the world. 

However, in the short term, prices could be negative, according to Bart Melek, global head of Commodity Markets Strategy at TD Securities. He believes that these conflicts could hurt equities, and there would be a move to cash in all asset classes. 

June will be extremely volatile – Coronavirus cases could escalate again

This month, analysts point to exceptionally high volatility levels for gold traders. Besides the US-China conflict, another essential thing to watch is the coronavirus infection rates. Economies continue to reopen, and there is a risk of a second wave of the virus. 

Typically, summer is pretty quiet for the precious metal. However, this summer is not going to be usual. This month has shown how all the reopenings will work. Analysts don’t expect gold to drop below $1,700.

Melek thinks that the gold market could face a lot of surprises in June. 

An economic reopening can be a turbulent period. Once people start intermingling, it’s essential to carefully watch how these reinfections rates move. Besides, the geopolitical tensions could worsen everything even more.

Analysts expect safe-haven demand to continue in summer months and gold prices are likely to go higher. 

Melek does not see a massive rally for gold; however, he does expect higher prices. According to him, the low-end will be in the $1,689-88 territory and the upper-end in the $1,758-60 area.

Millman sees reliable support on the downside. He expects an upper-end territory at around the $1,750 level.

 

  • Support
  • Platform
  • Spread
  • Trading Instrument
Comments Rating 2.5 (4 reviews)


You might also like

4 Comments

  1. Sophia Bromham June 9, 2020
  2. Jai McAlpine June 9, 2020
  3. Alexander Angwin June 9, 2020
  4. Zoe Giorza June 8, 2020

Leave a Reply

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spread
    Sending
  • Trading Instrument
    Sending