Gold Price Rises To $ 2,000 To Hit New Record

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Gold Price Talking Points

The price of gold explodes Psychologically Significant $ 2,000 Mark to score a new record ($ 2,026), and the extreme reading in the Index de force relative (RSI) may continue to be accompanied by higher gold prices, similar to the behavior seen earlier this year.

Gold Price Rises To $ 2,000 To Hit New Record

The price of goldkeep talking with new annual highs during each month so far in 2020, and the bullish price action may linger for the rest of the week, as the extreme RSI reading coincides with the crowding behavior of the US dollar.

The RSI is in overbought territory for the third time in 2020, as bullion continues to exhibit bullish behavior, and the price of gold may continue to rise as long as the indicator remains above 70.

At the same time, the IG Client Sentiment Report continues to show net long retail traders USD / CHF, USD / CAD and USD / JPY, while the crowd remains net-short AUD / USD, NZD / USD, EUR / USD and GBP / USD even though theIndex DXY fall for the sixth consecutive week.

In turn, current market conditions may keep gold prices afloat as Federal Reserve agrees to ” increase our holdings of treasury and agency mortgage-backed securities at least at the current rateAnd the depreciation of the US dollar may keep the price of gold afloat as president Jérôme Powell and Co. appear to be on track to maintain current policy for the remainder of the year.

That being said, the extreme reading of the RSI as well as the crowding behavior of the US dollar may keep ingots afloat, and the low interest rate environment along with skyrocketing central bank balance sheets may continue to act as a safety net for the price of gold as market participants seek an alternative to fiat currencies.

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Daily Gold Price Chart

Image of daily gold price chart

Source: Trading view

  • Tthe technical perspectives of gold price remains constructive as it trades at new annual highs during each month so far in 2020, with bullish behavior also taking shape in August as precious metals hit a new high in 2020 ($ 2,026).
  • The price of gold erased the previous one record price recorded in September 2011 ($ 1921) although the relative strength index (RSI) failed to keep the June rise, but the indicator Registered a new extreme reading (88) for 2020 as the oscillator has pushed into overbought territory for the third time this year.
  • Extreme RSI reading should be accompanied by rising gold prices in the middle Price action seen in february, and bullish behavior may persist as long as the indicator remains above 70.
  • The break / close above the Fibonacci straddles around $ 1971 (100% expansion) to $ 1985 (261.8% expansion) pushed the price of gold above the scores $ 2000 psychologically important, but it takes a closing price above the $ 2023 area (78.6% expansion) to put the $ 2092 region (161.8% expansion) on the radar.
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– Written by David Song, Currency Strategist

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