- Gold powers to an all-time high
- The stars are aligned for gold prices to continue to rise
- A lower dollar, aggressive monetary policy easing, ultra-low interest rates, negative US real yields, fiscal stimulus and the technical outlook all support gold prices
- Nonetheless, positioning does remain extreme which could encourage volatility
Introduction – Will gold break records?
On 9 July we released our Gold Watch – Gold gains from global stimulus measures. In this report we revised our gold price forecasts because the crucial technical resistance at USD 1,800 per ounce was taken out. Today the all-time high at USD 1,921 from 6 September 2011 was taken out. What do we expect going forward?
Stars aligned for gold price rises
The stars are aligned for gold prices and a test of the psychological level of USD 2,000 is within reach now. There are several reasons for this.
Firstly, since the start of July the US dollar has declined. For a start a more constructive sentiment on financial markets has resulted in lower safe haven demand for the dollar. In addition, investors shy away from the dollar because of the tensions between the US and China and the Presidential elections. Moreover, the handling of the COVID-19 situation in the US has weighed on the US dollar. Finally, the monetary policy easing by the Fed is a crucial driver of dollar weakness.