In trading throughout last week, world gold prices tend to slightly strengthen. Starting this week Monday (14/12/2020) gold was traded weaker.
The price of gold in the spot market arena fell 0.2% to US $ 1,835 / troy ounce. The price of gold had surpassed the closest resistance level to US $ 1,871 / troy ounce last week. But after that it turned around.
Mixed Sentiment in the Gold Market
This week, the sentiment in the gold market is mixed. Investors are again monitoring whether the gold price can return to the level of US $ 1,850 or not.
A survey conducted by Kitco shows that more Wall Street analysts are expecting gold prices to fall this week. Meanwhile, investors on Main Street still tend to be bullish.
There were 15 Wall Street analysts participating. Five analysts or 33% view gold price bullish this week. However, there are six analysts or 40% who project gold prices will be lower. The remaining 27% are neutral.
This differs from the expectations of investors on Main Street who are mostly still bullish. There are 54% of the total 1,507 respondents who estimate that the price of gold can still go up. Only 28% said the price would be lower. The rest are neutral.
Some analysts have begun to warn of a pattern of trading with lower volumes and high price volatility entering the holiday period.
“I think investors should close their books and come back in January,” Ole Hansen, chief commodity strategist at Saxo Bank told Kitco News.
Driving Factors for Gold This Week
Several factors that have great potential to move gold this week are the development of volume II fiscal stimulus in the US, the Fed’s central bank policy and the performance of the stock market.
According to Standard Chartered and TD Securities, the price of gold could still rise to US $ 2,000 / troy ounce for 2021. Standard Chartered said that the impact of vaccines and economic recovery could only be felt in the second half of 2021.
The news of the Covid-19 vaccination has indeed made gold prices depressed. The latest news is that the US FDA has approved the use of Pfizer’s Covid-19 vaccine and BioNTech for emergencies following the UK.
Unlike Standard Chartered and TD Securities, global investment bank JP Morgan sees that the price of gold will be under pressure in line with the increasing popularity of bitcoin among investors.
This can be seen from the inflow to Bitcoin worth US $ 2 billion since last October. At the same time, there was an outflow of US $ 7 billion from gold. This means that investors start selling gold and buying bitcoins.
Bitcoin is a cryptocurrency that has now entered one of the asset classes that investors are considering. When the price of gold collapsed below US $ 1,800 / troy ounce due to the massive sell-off, the price of Bitcoin almost doubled.
In September the Bitcoin price was still at US $ 10,000. But at the end of November the Bitcoin price shot up to the level of US $ 19,850. If this trend continues, it is not impossible that Bitcoin will become an asset that can beat gold in the future.
Read now: Now, Apple Pay Users Can Buy Bitcoin Cs
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