Gold Closing In On All Time Highs

orbex weekly metals wrap

0 85

Gold

The yellow metal saw an impressive rally this week, fuelled by the sell-off in the US dollar, which has seen price trading back up towards all-time highs.

The dollar has come under significant selling pressure this week as concerns over a strong upward trend in new infections and daily deaths have reignited fears of a second wave of the virus.

The greenback came under heavy selling pressure following a public address from President Trump this week. He urged citizens to wear masks, warning that the virus outbreak might “get worse before it gets better”.

Trump’s warning comes amidst building investor uncertainty relating to the dollar as the death toll there soars back above the 1000 per day mark.

Tensions between the US and China this week have also driven a strong safe-haven inflow into gold following news that Trump has ordered the closure of the Chinese consulate in Houston. China has warned that it could retaliate by closing the US embassy in Chengdu while Trump has said it is possible more Chinese consulates in the US could be closed.

This latest standoff between the US and China has raised further concerns over the potential for trade negotiations to break down again. The two countries have had several high-level disputes during the course of the COVID-19 pandemic. Traders are monitoring the situation with any further escalation likely to feed into higher gold prices on increased safe-haven demand.

Gold Rallying Back Towards All-Time Highs

Gold prices have now blown well above the 1826.71 level, breaking out above the top of the rising wedge pattern. Prices are now on track to test all-time highs at the 1919.92 level. The RSI indicator is confirming the fresh outbreak of upside momentum. While price remains above 1826.71, focus remains on further upside in the short term.

Silver

Silver prices have seen a similarly explosive move this week. Price broke out well above the 19.62 level, on course to retest the 23.52 level next. Silver has been supported by the weakness in the US dollar as well as the strength in equities, particularly industrial equities.

With the current environment likely to persist and USD weakness likely to continue, silver prices look likely to remain well supported.

Silver Approaching Key Resistance


Given the strength of moves this week, the focus remains on further upside here. A break above 23.52 will bring the major 25.97 level into focus. This is a long-term level and some selling is likely on the initial test.

Should price fail at the 23.52 level, focus will remain on further upside while the 19.62 level continues to hold as support.

TradingMetals

START TRADING

or practice on DEMO ACCOUNT

Trading CFDs Involves high risk of loss

Leave A Reply

Your email address will not be published.