The gold price is pushing higher once again in today’s trading session, following on from last Friday’s gains as some in the market raise fears about the recovery of the global economic recovery due to the effects of the coronavirus, with the main worries attributed to the continuous spread of the deadly virus in the US.
The World Health Organization or WHO over the weekend reported the number of global coronavirus cases rose a record 183,020 within a 24-hour period which cause some business giants such as Apple to temporarily shut some US stores as coronavirus cases continue to rise in southern and western states.
"While social distancing during March and April helped slow the spread, re-opening activities in a number of states, most notably Arizona, Alabama, Arkansas, South Carolina, North Carolina, Florida and Texas, have coincided with a wave of infections that may be spreading further south and west relative to the early affected states. In that sense, the recent increase in cases represents a rolling, as opposed to a second, wave of COVID-19 in the U.S.," said economists from Nomura Friday.
Some see $1,800 as a huge psychological resistance barrier for gold and as long as the coronavirus threat continues to linger we should see the precious metal well supported above $1,700 with sporadic attempts to break this elusive barrier.
It may take something else on top of the virus threat to help gold make a clean break and the ongoing trade wars between China and the US may be just the catapult that is needed to make this happen. If the world’s 2 largest economies continue to penalize each other with trade tariffs among other things, the overall global economy will suffer which will give gold added appeal as a safe haven.
“The market looks stuck in a range, gold needs to get above the $1,740 level. If it does, we can have a good rally,” Afshin Nabavi, senior vice president at precious metals trader MKS SA. “Wouldn’t be surprised if we see higher end of the range due to economical tensions thanks to COVID aftermath and tensions between the U.S. and China. Eventually, we should be heading to $1,800 or even higher before the end of the year.” he added.