Gold stabilizes at $ 1,700 an ounce, what could happen in June?
Gold prices have been quiet for most of May, with support at the $ 1,700 level. They have found the resistance level of $ 1,750 has extended to 1,760. The yellow metal has been regaining strength from a massive breakdown after the March recovery. What, then, could happen in June?
The most significant funds had to sell equities and collect the profits to cover margin calls on the shares and state bonds. Most of the sales in the market were because of forced liquidation.
The trading community started repurchasing gold, and as a result, made significant profits in a brief period. Once that ceiling was broken above the earlier $ 1,700 level, it made perfect sense for markets to see it as a significant support level.
Gold could reach the levels near $1,800
There are several reasons why gold is recovering in the long term. However, keep in mind that the gold markets operate on their own time. In other words, they don’t move much, after which they suddenly take off. This is because many nervous traders buy due to panic when things are not going well in other markets or the global macroeconomy. Furthermore, the trade war between the United States and China will inevitably erupt again. Christoper Lewis, a market analyst, stated that 2020 is an election year, and we could see a race that would make the candidates’ position with the Chinese clearer.
Another critical and supportive factor for gold is money printed by central banks around the world. This includes not just the Fed, but the European Central Bank, China, and other countries. Such an environment generates uncertainty as well as the devaluation of the fiat currency. This is generally good for gold.
Analysts think that gold will have a bullish trend this month. They see all the falls in June as an opportunity for buying. According to them, gold may reach $1,800 an ounce.
This year has seen enormous growth in the demand for precious metal. Compared to the previous year, the demand for gold coins grew by 80%. The Perth Mint, Australia’s official bullion mint, reported a significant increase in gold bullion and coin sales in both March and April.
Due to the shutdowns caused by the coronavirus, mining production has been reduced modestly. However, gold maintained a high demand.
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