Gold has risen 10.74% in the month of July, the biggest monthly increase since February 2016. As the price is breaking all-time highs it’s hard to say where the yellow metal could end up. Rajan Dhall, an analyst at FXStreet, believes a rise toward $2500 is on the cards but the $2000 psychological level is a more realistic target for now.
“Gold pushes higher whenever the Fed announce any more stimulus and the fact they didn’t could have been the reason some of the more recent moves have not been as bullish. There is also a good chance they are waiting for the White House to get their act together and announce the next round of fiscal stimulus.”
“Last week, the market got the information that GDP in the US and Germany took its worst hit since the second world war. The two economic giants are paramount to the success of the global economy and a drop of 32.9% for the US was not welcome news. This can only make the safe-haven status for gold shine even brighter than it ever has done. Those who are late to the party may get another chance to jump on the bandwagon if more stimulus is added and data remains this bleak.”
“It is very hard to pick a top as we are in uncharted territory. As a technical analyst, I must use the tools I have been given and the Fibonacci extension tool worked like magic the last time this happened between January 1980 and the low of September 1999. Looking at what could happen this time out the golden ratio of 161.8% is near $2500 per troy ounce. This may seem hard to fathom at the moment but it is a real possibility. Before that, the small matter of the $2000 per ounce psychological level has to be taken out first.”