Gold is the leading commodity in forex trading and comes only behind crude oil. During periods
of financial turbulence gold prices tend to outperform and during high risk periods it attracts
more investors.
The main and foremost reason Forex traders love this commodity is due to the
protection it provides during inflation. For example, for just 3% inflation Gold prices have been
recorded to be increased by about 15 percent.
US Dollar is the preferred currency for Gold and due to its intrinsic value, it is seen more as a
currency than commodity. Factors that may affect Gold prices include supply and demand,
interest rates, geopolitics, currency fluctuations, central-bank easing, and now Covid-19
pandemic worsening situations. It will surely test the new skies this year.
As the rebound in US Dollar happened on July 8, Gold futures are going downwards. Despite of
that, forex signals suggests that it is the nice time to buy Gold as it will provide a hedge against
a possible market crash.
Due to COVID-19 pandemic and an increasing number of cases, economies of countries and
the financial graph is fluctuating whose effect can be seen on Gold prices. On 8 July, Gold
prices touched 8-years high and it is being predicted that it may touch the highest level as it
touched in 2011.’
The best thing traders can do now is look forward. Our forex signal providers are assessing that
if US interest rates start to fall then Gold will definitely find support and it can be helped further
by economic reports.
This is a season of volatility and two-sided trades but coming days will surely tip the scale to
one side.
Talking in technical terms and figures, it is expected that Gold prices in August futures may
close above solid resistance at 1850 USD. And the downside solid technical support may come
at 1766.30 USD. First resistance will be seen at the overnight high of 1816.70 USD and then it
may reach 1825 USD.
In conclusion, it seems right that slow economic recovery will put a lot of pressure on
commodities except Gold creating a huge gap between them. Longer the present trend
sustains, traders should be prepared for seeing a all-time high.
Every single day is giving a rise to the graph of gold price which is contributed by commodity price deflation, ]
central-bank easing. We expect Gold to outperform most of other commodities and there is little measures to
stop this upward trajectory.
