Gold: long-term bullish forecast

Gold: long-term bullish forecast

2020-09-07 • Updated

Such credible banks as Bank of America and Citigroup made extremely bullish forecasts from $3 000 to $5 000. It’s hard to imagine right now, but let’s discuss why it may become true.

Even though gold has lost some of its gains, we must admit that this year has been the most incredible for gold. It has managed to reach record highs of $2 070 after the torrid rally. No wonder that the yellow metal surged so much amid the coronavirus outbreak. It’s natural that investors flow their capital into safe-haven assets during economic uncertainties as bonds have low or negative returns, and stock prices tend to be too volatile. Indeed, just a few months ago almost all the central banks warned that the coronavirus crisis pushed the global economy to levels unseen since World War II.

Besides, enormous financial injections from the US government flooded the market with dollars, which led to the depreciation of the USD. Moreover, the recent Fed’s statement to leave lower rates for longer weighed on the greenback as well. As a result, the dollar-denominated gold went upward. Nevertheless, now the USD is edging higher after the upbeat NFP report on Friday, which pushes gold to the downside, but some analysts warn that the post-NFP effect may soon fade. Notably, the long-term trend for USD is bearish, while gold is bullish. Actually, the yellow metal always sticks to the trend. Therefore, there are chances to see its’ rally again.  

What will happen, if gold reaches $10 000? Analysts believe that the US dollar is likely to lose its value of the world’s dominant currency in this case. In addition, other currencies such as the Swiss Franc will follow the USD. However, governments won’t allow this nightmare to happen, they will definitely find the way out of it. They may control currency flows or even more confiscate gold bullions from people. It’s not a fiction, it’s a real fact: the US government did that in time of the Great Depression.

Technical tips

We discussed above what may happen in the long run, let’s focus on the short term right now. Gold has been stuck inside of the triangle since August 7 and has failed to break out of it so far. The move below $1 925 will prove the breakout and drive the price to the low of August 26 at $1 910. In the opposite scenario, if XAU/USD goes above the resistance of $1 950, it will clear the way towards the next resistance of $1 970. Try to catch the overall sentiment and follow big economic releases as they will add volatility to gold!

XAUUSDH4.png

TRADE NOW

Similar

Oil In The Geopolitical Lens: Soars And Dips Under The Influence Of Global Events
Oil In The Geopolitical Lens: Soars And Dips Under The Influence Of Global Events

Amid uncertainty driven by geopolitical events, oil prices surged to record highs. However, a correction in oil prices is observed with a gradual improvement in the situation in the Middle East and an increase in demand. The question facing investors is whether there are prerequisites for further price growth or if everything depends on the dynamics of the political landscape. In this article, we will explore the impact of recent events on the global oil market and the prospects for developing this crucial commodity sector.

OPEC Boosts The Oil Market
OPEC Boosts The Oil Market

Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.

Latest news

WTI and Brent React To a Key Pivot
WTI and Brent React To a Key Pivot

Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...

XAUUSD: Will Gold Continue to Rally?
XAUUSD: Will Gold Continue to Rally?

Last week I gave a trade idea on XAUUSD with a target around the $2,020 price line. At the time of writing, XAUUSD already exceeded the target and I’m sure that would leave a lot of people wondering what to expect next. Below, I have presented my view of how I expect the price action to turn out in the meantime.

AUD: Trade Ideas
AUD: Trade Ideas

Last Tuesday, the Australian dollar experienced its steepest drop of the year, falling by 1.18%, following higher-than-expected US inflation figures, which boosted the US dollar. However, the Aussie has since rebounded and is now trading at a two-week high against the US dollar. Investors are...

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera