Gold remains on track to take out its previous all-time high of $1,918 per ounce despite a recent pullback to $1,731 on lower time frames.
The short term level of resistance to keep a watchful eye over is $1,765 as this was the top of the market in 2012 before a gruelling, six-year bear market.
However, gold is almost certainly in a ferocious uptrend having surged by more than 50% in two years as it benefits from instability in global currency markets.
The US dollar index (DXY) slumped to its lowest point since early March as the US Federal Open Market Committee kept the benchmark rate the same alongside revised GDP and inflation forecasts.
If gold can break out above $1,765 over the next few months leading up to November’s controversial US presidential election it will likely experience bullish continuation to a new all-time high.
Gold is often compared to Bitcoin in that it is considered a hedge to inflation and the traditional financial system.
Both Bitcoin and gold have enjoyed similar years in terms of price action with the world’s largest cryptocurrency rallying by 38% since the turn of the year while gold is up by more than 15%.
Respective rallies come as a direct result of global economic turmoil that has stemmed from the coronavirus pandemic and its subsequent lockdown.
Different countries have dealt with the crisis differently, with US president Donald Trump taking a polarising view that some believe has caused the nation to have more than two million cases of COVID-19.
There has also been scepticism over correct data and numbers coming out of China, which coupled with 2019’s trade war has added pressure on political relationships across the world.
In Europe, meanwhile, Brexit has been a big factor in destabilising the Pound but what’s worse is arguably the UK government’s response to the pandemic, with it being the most affected country by a dramatic margin when compared to the likes of France, Italy, Spain and Germany despite having a smaller population.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.