By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
On Monday, July 27th, the troy ounce of Gold updated its all-time highs and reached 1938 USD. A bit later, it had to correct but the major tendency remained the same – upwards!
There were two key triggers for Gold to go up. The first one lies in the investors’ high demand for “safe haven” assets: as long as the USA is looking for a new reason to fight with China, market players are keeping in sight a possibility of escalation. The second trigger is a quick decline in the USD rate. Gold is always inversely correlated with the “greenback” and one can clearly see this happening right now.
Capital markets’ physical demand for Gold is minimum, while the real sector’s demand is even lower. Industries are slowly getting back to their usual routine but their demand for the precious metal isn’t increasing.
Market players have serious doubts that the global economy will recover by a V-trajectory. This is another factor that supports Gold.
As we can see in the H4 chart, XAU/USD is trading upwards; it has already broken 1900.00 and may later continue growing with the target at 2000.00. Possibly, today the pair may reach 1955.90 and then start a new correction towards 1900.00. Later, the market may form one more ascending structure within the uptrend with the above-mentioned target. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving inside the histogram area, thus indicating further uptrend on the price chart towards the next target level.
In the H1 chart, the uptrend continues. By now, XAU/USD has broken 1920.20 and may continue trading upwards to reach 1950.50. After that, the instrument may form a new descending structure towards 1940.40 and then resume growing with the short-term target at 1962.60. From the technical point of view, the Stochastic Oscillator is moving downwards to reach 50. The indicator is expected to rebound from this level and start a new growth towards 80, thus confirming further uptrend on the price chart.
Any predictions contained herein are based on the author's particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.