- Gold prices traded above $1,800 per ounce for the first time in 9 years
- Investors have turned their attention to gold instantly amid the rising new COVID-19 cases
- Gold buyers are now targeting a move towards $1,860
Gold prices (XAU/USD) climbed above $1,800 per ounce for the first time since 2011 as investors flee to safe-haven amid the rising number of new COVID-19 infections. The bulls completed an ascending triangle chart pattern and are now looking to consolidate gains near the recent highs.
New 9-year high
Gold spot prices exceeded $1,800 per ounce on Tuesday for the first time in 9 years. This move came on the back of the record inflows and risk-off attitudes.
While the stock market is experiencing a slowdown, gold and other safe-haven investments continue to thrive. An increase in new coronavirus cases has raised concerns of another collapse for risk asset prices.
The Federal Reserve said the surge in the number of infected could sabotage the economic recovery. The Organization for Economic Co-operation and Development (OECD) highlighted that the epidemic’s labor market damage is “far worse” now than during the economic crisis.
Because of these concerns, investors have turned their attention to gold instantly. Since the beginning of the year, inflows for ETFs that track the metal surged to 655.6 tons on Wednesday, according to the reports. This is higher than the full-year increase recorded in 2009. Gold ETF holdings are at 3,234.6 tons at the moment.
Goldman Sachs, the investment banking company, set its 12-month price target for gold in June to $2,000 per ounce. The bank believes that gold prices will hit a record high during the epidemic crisis.
The firm doesn’t expect gold’s rallies to stop any time soon, as interest rates will stay close to zero over the next years and US dollar will have to face serious challenges.
“As we have argued in the past, gold investment demand tends to grow into the early stage of the economic recovery, driven by continued debasement concerns and lower real rates,” Goldman Sachs stated back then.
“Simultaneously we see a material comeback from [emerging-market] consumer demand boosted by easing of lockdowns and a weaker dollar.”
Similarly, Invezz projected Gold spot prices to hit $1,820 on the back of the activated ascending triangle. This is a bullish chart pattern that extends the uptrend after a brief consolidation.
We expect gold prices to consolidate around the $1,800 mark in the short-term. In case the correction goes deeper, watch out for $1,790, $1,780 and $1,765 levels and expect a reaction there.
On the upside, a break of $1,820 resistance would allow Gold buyers to join and target the Fibonacci extension at $1,860 next.
Gold spot prices have climbed 19% year-to-date.
Gold spot prices exceeded the $1,800 mark for the first time since 2018 amid the record inflows and risk-off attitudes. The buyers are still in control of the price action, with $1,860 the next target on the upside.