- Gold price has posted its first weekly decline in three weeks
- COVID-19 cases in the US continue to rise while Europe is not faring any better with this pandemic
- As long the price of gold is above $1800 this precious metal is in the “buy” zone
The price of gold has posted its first weekly decline in three weeks and finished the week below $1900. Despite this, gold remains in a bull market as the COVID-19 pandemic continues to dominate the financial markets.
Fundamental analysis: US stimulus and the upcoming presidential elections are in focus for investors
The attention of investors is focused currently on the US stimulus aid package negotiations and the upcoming presidential elections. Democrats and Republicans seemed to agree on a U.S. stimulus deal before Election Day even as coronavirus cases continue to rise and a labor market recovery stalls.
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According to some analysts, gold is still overbought and popular sentiment around this precious metal has grown greedy and euphoric. The price of this precious metal is currently below the $1900 level but 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 $1900 but investors trading gold should be a little more careful. 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 October if the dollar continues to weaken.
Technical analysis: Gold price remains in the “buy” zone
This precious metal has weakened last trading week and the current price stands around $1898.
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 has extended its correction from the record highs above $2 070, registered in the first week of August. Despite this, there is no reason to panic and as long the gold price is above $1 800 this precious metal is in the “buy” zone. The attention of investors is focused currently on the US stimulus aid package negotiations and the upcoming presidential elections.
