Gold continues increasing in price, although the market is generally optimistic. This strengthening is caused not only by a high demand for safe assets, but also by the weakening of the dollar, which is under pressure due to macroeconomic reports on the US economy, which are becoming more and more disappointing each time. Therefore, our forecasts were correct: gold overcame the psychological mark of 1,700 dollars after a period of consolidation, and rushed further to new highs.
Periods of optimism are short, and gold is supported by the worsening relations between China and the US, as well as reports of problems in the research of a coronavirus vaccine. Meanwhile, unemployment continues rising in the country with the highest number of coronavirus cases, the US. The number of new vacancies fell to the lowest level in 3 years, and the fall in industrial production in April dropped to a record low of -11.2%, which is 2.5 times lower than in March. The FOMC said that to stimulate the economy, it is ready for a negative rate, which also puts pressure on the dollar.
This week, starting today, the FED minutes, data on the real estate market and new data on the US labor market will be published. We can't expect a drastic improvement in the economic situation, so the dollar remains under pressure. Gold, in turn, can grow more, although the further upward movement will be long, with a large number of price corrections. However, most technical analysis tools consider deals on the trend to be the most effective in the long run. We also believe that gold will return to growth and test the $ 1,760 mark again, although short trades may also be profitable during a price correction in the short term.
