After reaching the highest gold futures prices in the past seven years, at $ 1,742 an ounce, profit taking has brought gold prices below $ 1,700. By trading abroad for a brief moment yesterday, gold broke through the old ceiling of $ 1,703, creating a new high, which will now become short-term resistance at $ 1,742.
At 4:30 p.m. EST, gold futures are currently trading at $ 11.30 and are set at $ 1,682.60. Spot gold is currently set at $ 1,650.86, which represents a net drop of about nine dollars that day. This decline incorporates a huge weakness in the dollar which has softened the impact of profit-making traders. Currently, the dollar index is down 0.82% and set at 99.93.
According to the Kitco Gold Index (KGX) earlier in the day, spot gold was only $ 7 that day. More importantly, the weak dollar allowed spot gold to gain $ 14.90 on the day. However, added to the low prices due to profit taking which amounted to $ 21.90, the end result is a drop of seven dollars.
Although US stocks are trading higher at the start of today’s trading session in New York, the Dow Jones industrial average has closed 26.13 points and is currently set at 22,653.86. Many analysts, including myself, believe that the current coronavirus pandemic continues to affect market sentiment, favoring a more bearish trend than during the recent ramp-up and rally.
The COVID-19 pandemic appears to be decreasing in many parts of Europe. At the same time, the Centers for Disease Control (CDC) and the World Health Organization are warning that the next two weeks will contain the peak of infections in the United States. That said, when we look at the statistics from the regions with the highest coronavirus concentrations, it looks like their numbers are starting to stabilize.
According to a report released today by MarketWatch, infected people are starting to recover: “The coronavirus is certainly scary, but despite the constant number of reported cases and increasing death toll, the reality is that the vast majority of people who descend with COVID-19 survives. As the number of cases increases, so does another number: those who have recovered. ”
Most importantly, those who recovered did so from people who fought the infection and have now created the antibodies necessary to prevent the virus from replicating, killing the virus. In theory, once an individual has created the antibodies for a particular virus, cells “remember” the viruses to which they have already reacted so that they can fight them quickly if they are exposed to a particular virus again.
Once this occurs in any population, the number of new infections will begin to decrease while the number of individuals recovered will increase. But according to warnings issued by the CDC, the United States has yet to see a peak or apex depending on the incubation period of this particular virus. This should happen this week.
The potential lasting impact is currently unknown and many analysts, including myself, believe that the price of gold may continue to move higher. This will include a series of peaks and valleys that will inevitably contain higher peaks during peaks and higher troughs during valleys.
For those who would like more information, just use this link.
Wishing you as always good trading,
Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has done everything possible to guarantee the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept guilt for loss and / or damage resulting from the use of this publication.