Gold futures recorded its best monthly (for July) gain in more than four years, settling +1% at $1,985.90/oz. after earlier breaking above $2,000 for the first in gold’s trading history.
July’s 10.3% gain showed the precious metal best monthly rise since February 2016.
Why is gold price rising; Gold price has gained about 30% so far in 2020, triggered by low-interest rates in many emerged markets that include Europe, Japan, and America. The widespread stimulus from global central banks has also helped in boosting the price of the safe-haven asset considered a bulwark against inflation and currency debasement.
Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics explained the macros gold traders will have on their minds, especially in the coming week. He said;
“After a hectic week on the gold desk, traders are left taking inventory of a crazy week on the gold counter.
“I think gold investors are fully loaded and not reacting to any correlations (for example, the weaker dollar higher gold), which suggests to me that investors are marking time while institutional traders are going over the data logs to game plan for next week.”
He however exposed fundamentals favoring gold’s price on its present support level. He continued by saying;
“The gold market’s holy trinity is still in play, which is the Fed policy geared towards depressing real 10-year yields, the US dollar status a reserve currency in question, while the Covid-19 headline reel continues to spin.
By Olumide Adesina