GOLD PRICE OUTLOOK: PRECIOUS METALS SURGE TO MUTLI-WEEK HIGHS ON THE BACK OF US DOLLAR WEAKNESS IN WAKE OF ELECTIONGold and silve
GOLD PRICE OUTLOOK: PRECIOUS METALS SURGE TO MUTLI-WEEK HIGHS ON THE BACK OF US DOLLAR WEAKNESS IN WAKE OF ELECTION
- Gold and silver costs rocket increased as treasured metals profit from US Greenback weak point
- Gold worth motion seems primed to renew its broader uptrend following a bullish breakout
- An sudden return of market volatility has potential to ship gold snapping again decrease
Gold and silver costs have notched explosive rallies over the past couple buying and selling periods. The 2 treasured metals have gained 3.6% and seven.5% respectively month-to-date with their advances seemingly mirroring the steep decline by the US Greenback. Additionally, a precipitous drop recorded by the S&P 500-derived VIX Index within the wake of the election additionally speaks to improved liquidity circumstances and maybe helps clarify the increase to gold worth motion. We mentioned these themes as potential catalysts for a bullish breakout by treasured metals in our latest gold forecast.
GOLD PRICE CHART: DAILY TIME FRAME (15 JUL TO 05 NOV 2020)
Chart by @RichDvorakFX created utilizing TradingView
Gold worth motion additionally seems constructive from a technical perspective. The newest topside breakout above key boundaries of resistance, such because the 50-day easy shifting common and short-term bearis trendline connecting the string of decrease highs since August, appears to unlock extra upside potential. Eclipsing October month-to-month highs and confluent help shaped all through August and September close to the $1,930-price stage appears to be a notable growth for gold bulls as nicely. This brings the $1,975-price stage into focus as the subsequent potential space of technical resistance earlier than the psychologically-significant $2,000-mark comes into play. A Bollinger Band enlargement may assist facilitate a protracted advance.
| Change in | Longs | Shorts | OI |
| Every day | -4% | 36% | 4% |
| Weekly | -16% | 27% | -8% |
GOLD PRICE CHART WITH US DOLLAR INDEX OVERLAID: DAILY TIME FRAME (14 APR TO 05 NOV 2020)
Chart by @RichDvorakFX created utilizing TradingView
That stated, it’s seemingly that the worth of gold continues to reflect the course of the US Greenback Index. Gold worth motion sometimes maintains a powerful inverse relationship with the USD as illustrated within the chart above. Additional US Greenback weak point may thus gas one other leg increased in gold and silver costs. Then again, a reversal by the US Greenback off multi-year lows, which might seemingly correspond by an uptick in market volatility, has potential to ship treasured metals snapping again decrease.
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— Written by Wealthy Dvorak, Analyst for DailyFX.com
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