The price of gold has advanced above $1960 last trading week and the current price stands around $1950. Gold has continued to trade in an uptrend as the COVID-19 pandemic continues to dominate the financial markets.Fundamental analysis: The scenario for the price of gold could be even better
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. Risk aversion will likely prevail at the beginning of the next trading week which is positive for the price of gold.
Joe Biden won the presidential election in his birth state of Pennsylvania this Saturday and he become 46th president of the United States. He has 290 electoral votes which is more than enough to capture the White House and to deny President Trump a second term.
Donald Trump said there is evidence of fraud in several of the deciding states that will be presented to the courts but this will not change anything according to political analysts. The attention of investors is focused currently on the US stimulus aid package negotiations and on the situation with the COVID-19 pandemic.
COVID-19 cases in the US continue to rise while Europe is not faring any better with this pandemic. The US reported over 100K new cases in one day and the pandemic pushed U.S. hospitals to the brink of capacity.
This is certainly not good for the economy but this could add another push to the price of gold. According to some analysts, gold is overbought currently and popular sentiment around this precious metal has grown greedy and euphoric.
Despite this, the scenario for the price of gold could be even better as the “dovish” Fed decision continues to pressure the US dollar. Gold price is expected to continue to be supported and could actually accelerate to the upside this November if the dollar continues to weaken.Technical analysis: Bulls are focused on breaking the resistance level at $2000
Gold price has continued to trade in an uptrend and investors trading gold are expected to be more active in the next several weeks.Data source: tradingview.com
The current resistance levels are $2000 and $2100, $1900 and $1800 represent the current support levels. If the price jumps above $2000 it would be a signal to buy gold and we have the open way to $2100.
Rising above $2100 supports the continuation of the bullish trend and the next price target could be located around $2300. On the other side, if the price falls below $1900 it would be a “sell” signal and we have the open way to $1800.Summary
Gold price has finished the week below the $2000 level but weakness in the dollar and low U.S. treasury yields could help this precious metal to advance again above this level. If the price jumps above $2000 that would be a confirmation of the “bullish” trend and the open way to $2050 or even $2100.