If you have some gold trinkets or jewellery in your drawer, what would you do if the gold price on the XAUUSD pair hits $2,300 an ounce? Impossible? Well, analysts at Goldman Sachs are saying that this is not only possible but could become a reality within a year.
Now before you sell all your property and go on a gold buying spree, you need to watch it. That an asset will hit new highs does not mean it will do so immediately. It may undergo a lot of up-down movements and may catch you buying at the wrong time. A lot can always happen between a lift-off from the earth and a moon landing, as the crew of Apollo 11 found out. They did lift off from the ground, and yes, they made it back. But they never made it to the moon’s surface, so do not put yourself in their shoes.
But if you understand how to navigate the waters, then you will realize that the weakness of the US Dollar has allowed safe-haven assets to experience a field day. Gold prices have hit new records, and silver is on a roller coaster. Goldman Sachs says it expects a $2,300 gold price, and a $30 silver price as well. These new forecasts have emerged today after the bank ditched its previous estimates of $2,000 for gold and $22 per troy ounce for silver.
The US is facing a time of uncertainty. The worst coronavirus infection/death rate in the world, escalation in US-China tensions, potential printing of more US Dollars to fund a new stimulus round and a political landscape which could all change in November are pressurizing the US Dollar to extents not seen in 2 years.
With US markets now approaching recovery peaks and mainstream investments like the housing market slowing down, the flight to gold and silver just seems like a rational decision among investors.
Gold price at the moment is touching off $1943.51, pulling back from yesterday’s record.
Technical Outlook for Gold Price
The weekly chart for XAUUSD shows that gold breached the previous resistance at 1918.68 yesterday. However, the price candle needs to close for a determination to be made on whether this resistance will hold firm or give way to profit-takers.
A drop below 1918.68 allows 1900.76 to become the new support target. 1869.39 and 1817.22 can also be considered if traders take profits extensively.
On the flip side, a bounce on 1918.68 could allow gold price to make a break for new highs, in accordance to Goldman Sachs’ projections. But such a move would have to overcome yesterday’s record-breaking top, which now presents itself as the resistance high for bulls.