Gold prices are at a near record high in 1921 the dollar, last seen in 2011. Obviously, nothing can prevent the price of the precious metal to reach its record level. For investors we are not talking about a record high, and about the price level of $ 2,000, and the question is whether the fall in this week the price of gold or rise? Another question being asked by traders is when the price of gold will reach $ 2000?
Grow if the price of gold?
On 24 June, the price of gold exceeded $ 1,900 per ounce, and the price of gold rose by almost 25%. In the last trading day the price of gold exceeded $ 1,900, which confirms that the bulls definitely plan to break this week’s record high.
What is the cause of rising gold prices?
Growth in gold prices has led to geopolitical tensions between the US and China, a weakening dollar and concerns about what will recover if the world economy. Unfortunately, apparently, the situation with either of these problems is not improving, so the odds stack in favor of those who plays on higher prices for gold.
Is it possible to say that the gold price will soon collapse?
This week is critical for gold prices, because these days the demand will either grow or fall. The reason is that the price of gold close to its record high, critical level, at which, probably, there will be massive orders to sell. Although I personally believe that the bulls controlled the price of gold, and nothing will stop them from being able to raise the price of gold. With this in mind, the growth of gold prices to record highs remains the General trend, which should be treated carefully and that can lead to the fact that many investors will make a profit.
The most important event for the dynamics of prices for gold this week is that on Wednesday the Federal reserve (fed) will announce the rate. Many expect that the fed will keep interest rates at current levels. We should not forget that from the fed in respect of monetary policy depends on the price of the dollar, which affects the price of gold. Dovish monetary policy aimed at maintaining interest rates at the same level or decreasing, usually adverse for the dollar and supportive for gold prices and Vice versa.
It is expected that the fed will make it clear that you have no expectation of U.S. economic recovery. The emergence of the second wave of coronavirus negative impact on gold prices. The fed can claim that the coming months may take additional steps to support the U.S. economy. If the rhetoric of the fed will be especially “pigeon”, I believe that there is a higher chance that the price of gold will cross the historic high. She can cross the mark of $ 1,950 and even come close to around $ 2000.
Investors should watch what they say in Washington about the stimulus. If an incentive will be given “green light”, we can once again witness the growth of the stock market, and the idea of another collapse of stock can dissipate like smoke. Increased demand for risky assets could lead to a slight decline in gold prices, but this does not mean that the price of this metal will lose its momentum. Otherwise, count on the fact that the price of gold will reach 2000 dollars, is not necessary.
The main conclusion
The main conclusion is that the dynamics of gold prices steady, but investors should remember that rising gold prices to its record high — the event is not ordinary. It may cause some profit-taking, but is unlikely to change the path of least resistance, which is still biased upwards. I am of the opinion that, with respect to the price of gold we are not talking about a record high, but about going beyond the price level of $ 2,000.