Technical Analysis

Gold finally touches the $1,800 level

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Gold has been on the rise since mid-June and buyers have managed to finally reach the $1,800 level after much adversity over the past two to three months.

So, what’s next for gold now?

Price is now at its highest level since November 2011 and keeping a daily break above $1,800 would be the first key test. But I would argue that profit-taking activity is rather attractive at current levels, although gold fundamentals remain as strong as ever.

Central banks continuing to keep rates low and adopt accommodative policy while keeping the printer running, that’s going to keep the tailwind behind gold for years.

But as we know, markets never move in a straight line. That said, the track higher in gold towards $1,800 isn’t quite a parabolic one but rather flows slowly building in the commodity over time.

The 2011 high @ $1,921 will be the key upside target for buyers in the long-term but I reckon we could see gold consolidate around $1,800 levels (if we do observe a firm break that is) with buyers likely to take profits and reassess the market situation.

It has been a stellar 2020 for gold so far, having began the year just above $1,500.

And there is likely more to come considering how dragged out the reverberations of this crisis is going to be and central banks are basically tied down for the next few years.

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