Gold prices are within a whisker distance of touching the record high of $1,921, last witnessed in 2011. It is pretty clear that nothing can stop the precious metal reaching its record high. For investors, it is not about the record high, it’s about the $2,000 price level, and the question is whether the gold price will crash or shine this week? Another question being asked by gold traders is when the gold price will reach the $2,000 level?
Are Gold Prices Going Up?
The gold price crossed $1,900 a troy ounce on June 24th, and gold is up nearly 25% year-to-date (YTD). The precious metal crossed the $1,900 mark on the last trading day, confirming that the bulls certainly plan to thrash the all-time high this week.
The gold chart shows all-time high
What Is Driving Gold Prices higher?
Geopolitical tensions between the U.S. and China, the weaker dollar, and fears about the global economic recovery have driven gold prices higher. Unfortunately, nothing seems to be improving; therefore, the odds are stacked in favor of the gold bulls.
Are Gold Prices About To Crash?
This week is crucial because it will either make or break the rally for the gold price. The reason is that the gold price is close to its all-time high, a critical level that may experience some massive sell orders. Although, I do believe that the bulls are in control of the gold price, and nothing is going to stop them from pushing the gold price higher. Having said this, the gold price reaching a record high is still a headline that deserves respect and may see many investors booking some profit.
The most important event for the gold price this week is the Federal Reserve’s rate announcement on Wednesday. It is widely anticipated that the Federal Reserve will hold the interest rate at the current level. Remember, the Federal Reserve’s decision on monetary policy impacts the dollar price, which moves the gold price. A dovish monetary policy stance is usually harmful to the dollar and positive for the gold price and vice versa.
The Fed is expected to hint that the U.S.’s economic recovery isn’t what they anticipated. The emergence of the second coronavirus wave has adversely influenced the gold price. The Fed may indicate that it may take additional steps to support the U.S. economy in the coming months. If the message becomes especially dovish, I believe there are stronger chances for the gold price to cross the all-time high. It may cross the $1,950 and even come closer to the $2,000.
Investors should keep an eye on the stimulus talk in Washington. If we get a green light on the stimulus front, we may see the stock market rally again, and the concept of another stock crash may go out the window. A rally in the risker assets may take some shine off the metal price, but it does not…