Gold Prices Today
Gold prices today fell massively, dipping below $1,900 per oz in line with the falling stock market. Credit Suisse analysts also believe this is not the end for gold’s fall either. They believe that its new low will be $1,765 per oz before potentially reversing to new highs beyond $2,000 per oz as people return to buy gold or silver.
The level it seems everyone is looking for is gold to fall to $1,897 per oz. This is a resistance level for the metal, and whether it falls lower or bounces back has implications for the future of the gold prices. Credit Suisse also released this statement:
“Gold continues its expected consolidation following the move to our base case objective of $2,075/80. Whilst we continue to see the long-term trend higher, reinforced by falling U.S. Real Yields and a falling USD, our immediate bias remains for further consolidation above a cluster of supports at $1,897/37, which includes the 23.6% retracement of the rally from the 2018 low.” (Source: Kitco)
Despite being mostly bullish on gold in the long-term, they state that if the short-term downward trend persists, then gold prices today will seem strong in comparison to their projected $1,765 and $1,726 per oz prediction. On the other hand, they also said:
“We look for an eventual move above $2,075 with resistance seen next at $2,175, then $2,300. Whilst we would look for a fresh consolidation at this latter level, a direct break can see potential trend resistance at $2,417, with scope seen for $2,700/20 over the longer-term.”
What Is Causing the Gold Price Plunge Today?
Strong selling pressure overwhelmed the international market today in response to a multitude of sociopolitical news. One major piece of information fueling the selloffs is the fact that it appears COVID-19 is on the rise once again. Normally, you’d think this would raise the desire to buy gold today. However, as a result, the UK and Europe are considering massive reclosures. This alarming trend raised red flags for investors who began selling everything they could today. Thus, even though stocks are suffering, the gold prices today also plummeted. However, when the prices plummet, many suggest it could be a good time to buy gold or silver before the prices rise once again.
Gold Prices Today and US News
The US Dollar index has major gains today, although there are monumental losses in crude oil futures prices. It seems everyone is selling off everything and anything today in light of the incoming tumultuous autumn and winter with the resurgence of COVID-19.
The CDC also announced today that the “6 feet apart” guideline is not as accurate as they initially thought. The WHO is checking in with the CDC to confirm this new information as it could be vital for regaining control over the virus.
In the US, Congress is in turmoil after the death of Supreme Court Justice Ruth Bader Ginsburg due to complications from metastatic pancreatic cancer. It appears now the case of who will fill her spot is front and center for the US, which temporarily removes the US Economic Stimulus package from the discussion.
Powell, the Federal Reserve Chair, will testify before Congress this week to talk down the US Dollar. He will probably remind the Congressional members to stimulate the economy because the Fed has done what they could to stimulate the economy through new monetary policy. Therefore, monetary and fiscal policy remain open, and this uncertainty leaves room for gold to grow. But without a proper stimulus package, gold prices today and beyond might suffer in the “cash is king” environment.
Around this time of the year, stock and other financial markets tend to be more volatile. This is due to the fact that we are entering the final quarter. Adding COVID-19, the US election, and rising US-China trade and political tensions into the mix makes this market especially unpredictable at this time. On top of that, what is known as a “currency war” is also now rumored to be underway.
The USD and the Euro
Some believe a currency war is on the way, and theorize that gold will come out on top. Right now, the US Dollar is pinned against the Euro. But, commodity analysts at Commerzbank suggest that investors should keep their eyes on long-term trends instead of the current volatility.
Actually, Commerzbank continues to push gold as a tangible and rare commodity that will retain its value. This is simply because we cannot produce gold from thin air. All fiat currency can be printed through the “push a button,” and it has been massively printed during the pandemic. Although not many continue to pay attention to inflation, it is still a significant element. It will eventually return to the forefront of investors’ minds who may flock to buy gold or silver again later. Commerzbank also notes the Federal Reserve’s monetary policy meeting demonstrated a bullish future for gold. This is owing to the fact that the Fed announced not raising interest rates for loans through 2023.
Other factors at play for currency markets include the announcement by the European Central Bank President Christine Lagarde. Lagarde stated that the European economic recovery is unclear and completely dependent on the pandemic. Considering the fact that countries in Europe are looking to lockdown once again, this adds extra economic pressure. The ECB will also most likely not allow more appreciation in the Euro moving forward. Thus, the currency war between the USD and Euro may now be underway, and there is room for others to join, according to analysts at Commerzbank. Additionally, Ole Hansen, Head of Commodity Strategy at Saxo Bank, declared there is a risk of a further plunge for gold if the Euro falls under 1.17 against the US Dollar.
What is the Future for Gold Prices?
While no one knows for sure, paying attention to the critical price levels aforementioned will help you determine when is a good time to sell or buy gold or silver. The Gold to Silver ratio is also a helpful indicator of whether or not one metal is over or undervalued. At the time of writing, the ratio was around 1:77.
Although the future is never certain, when you want to buy gold or silver, it could behoove your portfolio to consider dollar-cost averaging. This is a volatile part of the year. But, having a set price for how much you are willing to spend when you buy gold today can help. Dollar-cost averaging can help you build up your portfolio against inflation. You will also be setting up a strong collection of safe-haven assets you can liquidate if or when you need it. Consider how much you are willing to spend each month and slowly build the value of your portfolio over time.
Buy Gold Today from Bullion Exchanges
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