Can gold keep 1550 under continued pressure?
At the beginning of this week, the precious metals market continued to fall under pressure.
Spot gold is currently down about $ 10, approaching the $ 1,550 level. Silver also continued to fall below $ 18.
Market commentary said that although last Friday ’s US employment data was less than expected to provide support for precious metal prices, worries over possible military conflict between the US and Iran subsided, and gold fell on Monday.
However, although the recent rally in gold seems to have stalled, technical analysis indicators show bullishness, close to oversold levels, and the price of gold may rebound in the next few days.
Swiss investment company Unigestion said that it prefers foreign exchange over gold as a hedging strategy.
Unigestion believes that gold has risen a lot and there is limited room for further gains. After rising 15% -20% in a year, it is difficult to expect gold to rise further unless economic turmoil or war in the Middle East occurs. Many investors are worried about the recession, but we are more worried about the opposite: a strong recovery of the economy will lead to higher interest rates, which may cause a significant correction in risk assets. If the economic recovery is too great, it will push the Fed to tighten monetary policy, and high-yield assets and emerging markets may be hit the hardest. Conversely, if the economy deteriorates, the Fed can mitigate the impact by cutting interest rates, thereby supporting risky assets.
Of course, the market is still dominated by gold bullion investment banks. Just last week, HSBC raised its 2020 gold price target to $ 1613 / ounce, saying geopolitical and trade risks could support gold prices.
HSBC said that strong investor demand diverged from weak emerging market physical and retail demand for gold. Increased fiscal spending or hedging by investors may also support gold prices. The main obstacle to further gains may be the strength of the dollar.