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Gold got a potential

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At the beginning of the week, gold locally strengthens after Friday's fall. Asset has been trading in an upward price channel for about a month and a new trading week has begun near its lower border. The width of the channel is about $25, so the local target for bulls is around $1485. However, even if buyers manage to raise quotes to this zone they will not stay there for a long time - the resistance level of $1480 per ounce is very strong.

In general, it makes sense breaking through the lower border of the channel and $1460 level, near which price is consolidating now. Gold has been traded in a bearish trend since the beginning of autumn and the current channel is just a correction. In case of continuation of the general trend and breaking through the lower border of the channel, quotes will fall down to $1430-1440.

Goldman Sachs recommends diversifying investment portfolio with gold. Bank analysts consider it reasonable to invest in an asset up to 10%. Also they predict the resumption of gold price growth to $1600 per ounce in 2020.

Dutch investment bank ABN Amro also believes that gold has long-term growth potential. According to the forecast of the bank, the ECB will reduce interest rates by 10 basis points in Q1 of 2020, as well as increase the program of a quantitative easing. The US Federal Reserve may reduce the rate by 25 basis points. As a result, a global reduction in rates will support gold market and the average gold price in 2020 may reach $1500 per ounce. And in Q4 it can grow to $1575 with further growth potential.

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Source: https://olymptrade.com/
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