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Gold may reach $ 2,000 per ounce

Gold remains near new all-time highs amid a weakening dollar and present economic risks from the spread of the COVID-19 pandemic.

 

The season of corporate reporting has started in the USA. Several top US companies reported weaker-than-expected financial results, fueling fears about the impact of the coronavirus pandemic on the world's largest economy. Major American indices closed in the red zone. To reduce risks, investors continue to buy gold, despite the growth of its value to historical highs.

 

The USD dynamics and the yield curve of the American Treasuries continue to have a positive impact on gold.

 

The central event of the day will be the FOMC meeting. Most experts agree that the regulator will keep the interest rate unchanged, but will indicate its readiness for additional actions to support the economy and reaffirm its commitment to maintaining a soft policy for an extended period of time. On Tuesday, the FRS announced the extension of the emergency lending program until the end of this year. It was previously planned to complete the program in September.

 

Obviously, the softer tone of the FRS statement may increase the pressure on the US currency and the yield curve of US government bonds, opening new horizons for gold growth.

 

The chart is still dominated by a strong bullish trend. The price quickly recovered after a correctional decline to the 1910.00 area. Now the bulls are holding the price above 1945.00. In all likelihood buyers do not intend to postpone testing the psychologically important level of 2000.00.

 

Resistance levels: 1975.00, 2000.00;

 

Support levels: 1945.00, 1921.00, 1900.00.

 

The main scenario - growth to 1975.00.

 

An alternative scenario - a decline below 1945.00 and a retest of the support at 1921.00.

The current fundamental outlook is positive. We would consider levels 1945.00 and 1921.00 as entry points. A promising target is the level of 2000.00, which can be tested before the end of this week (possibly today).

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