The price of gold has finished the week above the $1900 level and if the price jumps above $1950 that would be a confirmation of the “bullish” trend. Concerns about sluggish economic growth amid the ongoing pandemic continue to dominate the financial markets.Fundamental analysis: Fiscal stimulus package may still be possible before the November 3 election
Gold advanced for the week as investors hope that a fiscal stimulus package may still be possible before the November 3 election. The price of this precious metal is currently above the $1900 level and sentiment for gold remains bullish over the long-run.
The weakness in the U.S. dollar and low U.S. Treasury yields could help this precious metal to advance again above $2000 but investors trading gold should be a little more careful. According to some analysts, gold is overbought currently and the price of gold has become disconnected from fundamentals.
Despite this, there is no reason to panic and as long the price of gold is above $1 800 this precious metal is in the “buy” zone. Risk aversion will likely prevail at the beginning of the week which is positive for the price of gold.
Gold is considered a safe-haven asset and the price of gold has advanced in the wake of the coronavirus crisis as investors look for safer places to invest their money. COVID-19 cases in the US continue to rise while Europe is not faring any better with this pandemic.
This is certainly not good for the economy but this could add another push to the price of gold. Gold price is expected to continue to be supported and could actually accelerate to the upside this November if the dollar continues to weaken.Technical analysis: Bulls are focused on breaking the resistance level at $1950Data source: tradingview.com
Gold advanced for the week and the current price stands around $1901. The current resistance levels are $1950 and $2000, $1850 and $1 800 represent the current support levels.
If the price jumps above $1950 it would be a signal to buy gold and we have the open way to $2000. Rising above $2 000 supports the continuation of the bullish trend and the next price target could be located around $2200.
On the other side, if the price falls below $ 1800 it would be a strong “sell” signal and we have the open way to $1 700.Summary
The price of gold is supported by uncertainty over the global economic future and safe-haven assets typically perform well during downturns and financial crises. The attention of investors is focused currently on the US stimulus aid package negotiations and the upcoming presidential elections.