Gold does not let itself be bent by stock market euphoria and maintains the upward thrust towards 2020

The price of spot gold remains dynamic in the final stretch of 2019, despite the bullish party in the main stock markets of the world as in the US stock market. At the time of this writing, the price of XAU/USD rises 0.15% to the edge of the $ 1514 and reaches levels not seen since the beginning of last November.

With the gains recorded in recent days, gold is set to close the week with an advance of almost 2.4%, its best weekly performance in more than four months, while outlining an annual revaluation of 18%.

By 2020, it is quite likely that gold retains a bullish tonic, although its increases would be more limited than those of 2019. Here are some factors that would act as positive catalysts for the price of bullion:

• The political uncertainty in the United States. On November 3, US citizens will go to the polls to elect a new president. The electoral process could generate volatility in the markets and, therefore, a greater appetite for defensive assets. That would benefit gold due to its nature of refuge value.
• The expansive monetary policy of the main central banks in the world. Although they do not expect new stimuli, it is quite likely that the Fed and the ECB will maintain an accommodative monetary stance for a prolonged period of time. This would ensure an environment of low yields in fixed income, reinforcing the demand for gold.
• Greater institutional purchases. Some central banks such as China, India, Russia and Turkey have been dramatically increasing their gold purchases in recent years to “de-dollarize” their reserves. This trend would continue in 2020, creating a benign environment for gold.
• Less mining investment. In recent years, the world’s largest mining companies have reduced investment levels. This could limit the supply of gold, generating increasing upward pressure on prices given the growing dynamism of demand.

GOLD TECHNICAL ANALYSIS

At the beginning of the week we talked about the development of a bullish pattern of descending wedge in the daily chart of gold. This technical training has been confirmed with the breaking of resistance in the region of 1477/1483 . After the configuration validation, the baseline scenario assumes an initial movement up to $ 1520. A perforation of this roof, defined by the October and November highs, would bring the 2019 highs zone around $ 1557 into play.

In the case of an unforeseen bearish turn, the first support under consideration is located at 1483/1477 and then at $ 1467.

GOLD TECHNICAL GRAPH