Gold has been traded long since mid of June until August 7 from $1765.00 per troy ounce to hit a new high of $2073.543 per troy ounce. The yellow safe haven asset has been increasing in value dramatically due to the Covid-19 pandemic. In addition, due to several factors’ gold started to drop and traded short to $1863.173 per troy ounce retesting July 22 level.
Firstly, gold started to drop because of gold holders represented by banks and institutional traders has decided to sell the yellow metal to cash out and rebalance their portfolios to invest into more risky assets. Secondly, some political decisions from the U.S. represented by the democrats and republican had an influence on gold value after they failed to accord upon new COVID-19 rescue package that increased the value of the greenback as it has been oversold for quite a while.
The last reason of decreasing gold value is that investors has started to sell gold and invest on some of the valuable potential pharma stocks which they have large market capacity and great opportunity to buy and hold.
Due to the several facts, which were mentioned above, gold prices have collapsed fundamentally. However, from the technical analysis point of view a potential recovery of the safe haven asset broke the trend line structure and made a higher low. Through the fundamental and technical analysis, it seems that gold has been started to become more valuable and will reach the first high at $1978.020 and second phase high up to $2023.955.
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