Gold Is Expected to Reach $1920 by the End of 2020
10.07.2020, 05:57

Gold Is Expected to Reach $1920 by the End of 2020

Gold is being kept and used as a hedge instrument against the inflation and losses on the stock market worldwide. Bullion prices typically move higher as economic conditions deteriorate. As the globe is trying to overcome the devastating effect of COVID-19, the gold is still acting as the saver option for traders, whereby it is a clear picture of remain bullish since March. For the first time since 2011, the Yellow metal broke out $1800 level and reached towards the $1825 level, which shown a strong breakout. Thursday, the gold was a volatile movement between $1795 to $1815. Friday, gold spot shows a little movement with the lowest level of $1795.6 and the highest at $1804.12.

From a technical perspective, according to Fibonacci extensions, the expected target of gold is $1920, which is considered the fourth level wave, after breakout the third wave of $1807. For the long-term investment for gold, it is probably going towards the $2000 level but that is going to take a significant amount of time. Historically, Gold has a drop zone between 2012-2015, following by reversion improvement from 2016-2019. Since February 2020, the global market is affected negatively by the COVID-19 lock-down. The gold started to recover gradually since March 2020. Despite the short-term movement, we expected a target of $1920 before the end of 2020.

From the fundamental point of view, central banks worldwide cut interest rates to help soften the blow to the economy from the pandemic that should help keep a solid long-term foundation intact. Analysts are expecting further gains for the Yellow metal. Xiao Fu analyst of Bank of China International said “The combination of global central bank easing, geopolitical risks, the persisting pandemic impact and global recession could continue to push gold prices higher in the medium term.” Howie Lee, economist Oversea-Chinese Banking Corp said that “the previous record close of $1,900 is now in plain sight and we suspect gold might even attempt $2,000 before the end of 2020 if the number of US cases does not abate.”

Furthermore, gold is an investment and not a safe-haven asset. If money continues to flow into stocks and higher-yielding currencies then non-interest or dividend-paying gold is going to struggle because it competes for investor capital with those higher-yielding assets.

  • Name: Hussain Shabbir
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