Gold bulls chomping at the bit, all-time highs still in focus
Source: Economic Events July 22, 2020 - Admiral Markets' Forex Calendar
Even though volatility in Gold has remained subdued over the course of the last few weeks, the precious metal marked new yearly highs over the last few days and the overall picture for Gold stays very positive.
The Citi Economic Surprise Index rose to a new all-time high recently, suggesting that the economic downturn and the risk of a global recession are diminishing, but data from the US Housing market shows rising delinquencies in US mortgages and underlines the rising scepticism in regards to recent earning releases from US banks like JP Morgan.
Reading through the report of Q2/2020 earnings carefully shows that profits mainly came from the corporate and investment banking division, offsetting losses in the consumer and commercial banking sectors, where JP Morgan put $8.9 billion aside for expected loan losses.
These developments help to explain why the Fed Balance Sheet started rising again after five straight weeks of declines, and why we shouldn't expect this development in the near future.
As we expect the 10-year US yields to sustainably drop below 0.60%, to new all-time lows, our outlook for Gold stays bullish, here being a bullish catalyst to drive the precious metal up to its current all-time high around 1,920 USD, with the mode staying technically bullish on a daily time-frame as long as we trade above 1,660 USD:
Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between April 23, 2019, to July 21, 2020). Accessed: July 21, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of Gold fell by 10.4%, in 2016 it increased by 8.1%, in 2017 it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.
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