In long term gold has always been in an uptrend. Gold is valuable because of the limited supply and it is considered as a safe-haven asset for economic uncertainties. One can not print more Gold like you can do it with currency. That’s why EURO has lost 85% of its value against Gold.
There is no reason to believe that Gold will start losing its value now. Since September 2018 Gold price has started to climb at a much faster pace. At the end of September 2018 Gold price was around 10500 SEK per ounce. At the end of April 2020 the gold price reached an all-time high in Swedish Krona. The yellow metal was trading around 17500 SEK per ounce.
Gold gained over 70% of value under 2 years. It shows that this soft metal is holding and gaining value over time. It also shows that the economical situation is facing some issues and might be cooling down. When investors lose confidence in the stock market, they move money to precious metals. Like mentioned before Gold is considered safe-haven in uncertain times
Gold will continue its long-term uptrend. This to happen the price needs to break the short-term downtrend and close above 16800 SEK.
Gold price will make a correction close to 15500 SEK per ounce, near the strong support zone. The price could reach there at the end of August and the next short-term bull-run could happen in September.
Many specialists think that the next Covid-19 cycle will happen also in autumn. When this happens we are facing another quarantine-season, even stronger economic crisis and even higher gold prices.
The technical analysis strongly supports this scenario.
Gold price will break the current support area near 15500 SEK per ounce and will enter a strong down-trend.
Disclaimer: This article is for informational purposes only and is not intended as an investment analysis or recommendation to sell or buy commodities. Tavex is not responsible for any decisions made based on this information. Investing is associated with opportunities and risks, and the market value of commodities can both increase and decrease. Past or future yields on the commodities and financial ratios shown above do not represent a promise or an indication of future earnings.