Gold Forecast: July 2020

Robert Petrucci

A bullish market continues to be demonstrated by Gold as buyers appear unafraid of its lofty values.

Speculators who have been trying to wager on a downward reversal in the Gold market may be suffering from depression at this time. The precious metal continues to prove resistance levels vulnerable and the long term trend remains solidly bullish. Gold has put in gains on a fairly consistent basis since September of 2018. Now may not be the time to suddenly wager a reversal downwards is going to develop for the precious metal.

The price of 1800.000 USD is the next big resistance target for speculative buyers of Gold. The past month of trading has seen a recovery of lows from the 1680.000 juncture around the 5th of June and fairly steady buying sustained since then. Yes, Gold does suffer from declines. Yes, speculators can sell the precious metal and take advantage of short term reversals, but the words ‘short term reversal’ should be paid attention to carefully. Technical traders with a high degree of skill may be able to attain worthwhile profits by going against the bullish trend in the Gold market when they believe the market is overbought, but in order to do this a trader needs a substantial amount of cash and secure stop losses.

If a speculator is looking for short term downward momentum the 1760.000 USD level may look like a legitimate support target. However, going against the trend in the Gold market could prove very costly and traders who have the ability to follow the trend upwards and emotional strength to handle declines which can develop on a daily basis may find the opportunity for further gains. The question speculators should ask themselves is where the greatest room for movement will develop? They might also want to ask themselves why Gold is continuing to trend upwards on a nearly monthly basis for the past year and a half.

Risk appetite in the global equity markets continues to attract buyers, but the money flowing into equities and driving their values higher is likely coming from financial houses which manage institutional money and have few options regarding destinations to park their cash and seek profits for their clients. Gold however may be enjoying multiple fruits from a wide array of investors. Financial houses which may believe the long term health of the global economy remains unclear may be seeking the safe haven of gold, investors who believe the major central banks such as the Federal Reserve and European Central Bank are practicing bad policy may find gold enticing also.

Gold from a fundamental standpoint is a hedge against inflation. Yes, while the global economy actually is dealing with a collapse of international commerce as coronavirus causes harm and stops companies from working, on the surface there is little fear about inflation becoming troublesome in the short or mid-term. However, concerns about the health of the global economy are also being weighed against policy decisions from the likes of the Federal Reserve and the belief that there may be a legitimate long term threat to the value of the US Dollar which could cause massive inflation.

Technical traders however may not be paying one penny’s worth of attention to the fundamental reasons why Gold is attracting institutional buyers. Traders need to pay close attention to the trend and the precious metal continues to indicate it would be unwise to bet against it. Speculative buying positions should remain the battle cry in the Gold market with carefully chosen stop losses in place to protect against volatility. Buying Gold on dips could prove worthwhile and higher targets may find the month of July provides an opportunity to test higher values.

Gold July Monthly Speculative Forecast:

Current Resistance: 1800.00 USD

Current Support: 1760.00 USD

High Target: 1850.00 USD

Low Target: 1744.00 USD

Gold

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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