The Price Of Gold, ” Talking Points
The price of gold is treated to a fresh annual high ($1760), because it extends the series of higher highs and lows of the previous week, and a break above the November 2012 high ($1754) may retain the precious metal to flow to the Relative Strength Index (RSI approaches overbought territory.
Gold price Forecast: Breakout and allow the growth of RSI To the Overbought Territory
The price of gold has traded to fresh yearly highs during each month of the year 2020, and the precious metal may continue to present a behavior to the upside, as the President of the Federal Reserve Jerome Powell warns against tight at the back.
In a recent interview on the CBS News President, Barry began by saying that the american economy may “in effect, the gradually in the second half of this year” as long as states have begun to reverse the stay-at-home orders, but went on to say that the disruption of economic activity, “could stretch until the end of the next (in a year)if a second wave of infections to emerge.
Chairman Powell noted that “It can take some time” for the UNITED states to recover from COVID-19 “it is very plausible that the economy is going to take some time to pick up speed” with the central bank, stressing that the Federal Open Market Committee (FOMC) is theno ammo” the central bank to increase its balance sheet.
However, President Powell then revealed that officials are ““on the Federal Open Market Committee, to continue to think that the negative interest rates is probably not appropriate or helpful for us here in the United statess, and it seems that the Fed will continue to tame the speculation for a a negative interest rate policy (IT) as a “there’s really no limit to what we can do with these commercial programs that we have.”
In turn, the FOMC may become more dependent on its unconventional tools, as in the benchmark interest rate is ” the effective lower bound (ELB), and it remains to be seen if the unprecedented efforts taken by monetary and fiscal authorities, will stimulate a V-shaped recovery, as U.S. lawmakers try to pass another stimulus program.
That said, the the low interest rate environment, the long balloon the central bank balance sheets can act as a safety net for the goldas the marketparticipants searched for an alternative to the fiat currencies, and the price of bullion may continue to perform a behavior is bullish, as it extends the series of higher highs and lows of the previous week.
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Gold Price-Daily Chart
Source: The Negotiation Of The View
- The opening of the range at the horizon 2020, it instilled a constructive outlook for gold prices, the precious metal is seeing the 2019 is the high ($1557), with the Relative Strength Index (RSI) pushing into overbought territory during the same period.
- A similar scenario was solidified in February, with the price of gold is resistant to the monthly low ($1548) during the first full week, while the RSI broke out of the bearish formation from earlier this year to push back into overbought territory.
- However, with the monthly opening range of This axis is less and less relevant in the middle of the upswing in volatility, with the decline from the monthly high ($1704) leads to a break of the January low ($1517).
- Nevertheless, the reaction of the old area of resistance at around us $1450 (38.2% retracement) to $1452 (100% real) has instilled a constructive outlook for the bullion as far as the RSI changed course to advance into oversold territory, and broke out of the bearish formation from November.
- In its turn, had been erased from the March high ($1704) to the tag to a new annual high ($1748), in April, with the behaviour, also taking shape in May, as the precious metal trades-to-a-fresh-2020 ” high ($1764).
- The break/close above the $1754 (261.8% expansion) region, which aligns with the November 2012 high ($1754), open up, and the $1786 (38.2% expansion) of the area, with the 2012 high ($1796), then on the radar.
- The RSI highlights a dynamic that is similar, as the unit breaks out of the downward trend carried over from the previous month, and the bullish momentum may accelerate if the indicator break above 70 and allow pushes into overbought territory.
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— Written by David Song, Currency Strategist
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