- Gold prices recover to inch higher
- Bank of America predicts gold prices could hit $3,000 in 18 months
- Global fiscal and monetary stimulus supporting gold prices
Gold prices (XAU/USD) have been on the rise this week after jumping 1.9% on Wednesday on the expectation that additional monetary and fiscal stimulus could ease economic fallout because of COVID-19. On Friday gold inched higher supported by sentiment for the yellow metal and Fed’s stimulus package.
Fiscal and monetary stimulus to the economy pushing gold prices higher
Gold prices have been rising and they are currently at historic highs since the 2008 crisis. Signs of an economic downturn are prevalent with interest rates having been struck in a bid to save businesses and the economy. However, the cutting of rate is risky more so if the coronavirus pandemic endures and pushes the global economy into a freeze for long.
The current situation has however favored appetite for haven assets such as gold that to protect themselves from losses. Gold and other assets could trigger riskier plays and result in edgy demand profiles. Gold has received support from the widespread global stimulus packages by central banks because it is considered a hedge against currency debasement and inflation.
The trend for gold is currently bullish and could see the precious metal climbing above $1,730 which will open up an opportunity to test $1,747. There is also a possibility of gold even recording a new high.
For instance, Bank of America is upbeat about the price and it is predicting that the prices could rally over 80% to around $3,000 per gold ounce within 18 months as fiscal and monetary stimulus continues to trickle in. Spot gold is traded at $1,732.69 per ounce and US future gold was up at $1,758.2 on Thursday The yellow metal might encounter resistance at $1720 or $1738 before testing resistance in the long term at $1746.
Time : 24-04-2020
Pivot : $1,723.44
Technical View : Long position above $1,731.07.
Target : $1,738.19.
Comments : There is bullish sentiment on gold and it could surpass recent highs
Last Price : $1,732.69