We all saw the rise in gold prices to return and break through the levels of USD 1900. And this is what we expected in all our analyses. Also, I had mentioned that gold will not fall its price lower until the end of the year to levels below USD 1760 per ounce using the phrase “gold is not for sale” in many positions.
Currently, what I see about the prices of the yellow metal gold is gaining positive strength that may push prices to higher levels during the next sessions. This confirms the stability of prices above the level of axial resistance positioned at the point of 1932 dollars per ounce. Where the first target-to raise prices – at the levels of 1970-1975 dollars per ounce.
It is worth mentioning that the breakthrough of this goal 1975 and the stability of prices above these levels gives me a strongly positive view that gold prices will rise to achieve a new historical peak at the levels of USD 2280 per ounce or at least prices will rise to test the penetration of the last historical peak at the level of USD 2075 per ounce.
There are many economic and geopolitical reasons that affect the price of gold positively. Firstly, the latest fallout of the coronavirus and the emergence of the new strain and what may happen from the closures of countries, the most important also focus on vulnerability to inflation and high rates with stimulus packages in addition to the high holdings of central banks for gold.
Technical explanation of gold price variation
We have to take into account that a corrective decline or so-called “buying momentum rally” decline can occur as follows: Gold is above the resistance level of USD 1,932 per ounce, so it’s not for sale at all.
If the support formed at 1928 levels is broken, we will see a downward correction to 1911 levels, including USD 1902 per ounce. The stability of gold prices below the psychological support level of USD 1900 per ounce will postpone the resumption of the upward trend for March 2021. Which does not mean the fall of gold prices as we will see an occasional movement of gold prices ranging between USD 1800-1900 per ounce during this period.