The gold price is holding on to $1,640. After a quick jump yesterday above $1,650, the price declined to $1,630 due to the recovery of S&P 500 and other US major indices. This morning, with European indices in red, bullion was able to recover to $1,640. After a few days of direct correlation with stock markets – due to the Fed’s decision to cut interest rates from 1.75% to 1.25% – we are back to the usual inverse correlation. In other words, gold traditionally performs best when stocks are falling.
A fresh climb above $1,645 would offer a strength signal for bullion, even if this scenario remains strongly linked to the latest updates on coronavirus and its impact on stock markets.
Chief analyst at ActivTrades and technical analyst for Italian newspaper 'La Stampa'. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a weekly commentator for CNBC Italy and a columnist for La Stampa. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
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© 2019 High Leverage FX - All Rights Reserved.