Gold price fights back, rises 2%, hits $ 2,000 an ounce

Editor’s Note: With such market volatility, stay up to date with daily news! Take a minute to read our quick summary of today’s must-see news and expert advice. Register here!

(Kitco News) – After falling to the carpet last week, the gold market has rebounded and is fighting tooth and nail to recover the 2,000 ounce level.

The precious metals market saw renewed momentum after suffering its biggest weekly loss since March. December gold futures last traded at $ 1,989.90 an ounce, up 2% on the day. The yellow metal briefly pushed to $ 2,000 before falling back.

While the gold market has been in the spotlight, some analysts have noted that silver is the metal investors should watch out for. Silver outperformed gold on Monday with prices rising more than 5% during the session. September silver futures last traded at $ 27.55 an ounce.

Gold and silver saw consistently higher prices throughout Monday’s trading session, as a weaker US dollar and disappointing global economic data arrived over the weekend.

Regarding gold, analysts said that after Monday’s rally to $ 2,000, the ounce will be the key level to watch this week as the precious metal appears to enter a new period of consolidation.

“Tuesday will be an important day for gold and we need to see if we get some follow-through buying after today’s rally,” said Charlie Nedoss, senior market strategist at LaSalle Futures Group.

Nedoss added that last week’s sell off, while significant, was a healthy correction for the market. He added that with a weaker US dollar and falling bond yields, he is not surprised that gold made a strong comeback earlier in the week.

Although bond yields started the day near a one-month high, they saw a steady decline on Monday afternoon. US 10-year bond yields last traded at 67 basis points, down more than 4% on the day.

“This move in the bond market is definitely a bullish environment for gold,” Nedoss said. “The question is, can this help gold break above its 10-day moving average at $ 2,000 an ounce.”

However, it is not just the US markets that are helping the gold market regain lost ground. Bill Baruch, president of Blue Line Futures, said rising geopolitical tensions between China and the United States created a win-win scenario for the precious metals markets.

Not only are China and the United States a long way from resolving their trade and economic problems, but overnight the Chinese central bank launched more stimulus measures to support its failing economy, which has come under pressure from US sanctions. and was devastated by the COVID-19 pandemic.

“These stimulus measures are a huge tailwind for gold,” said Baruch.

Baruch said he is currently monitoring support between $ 2,004 and $ 2,010 in the short term. As for how investors should play in the current gold market, Baruch said investors should not be chasing prices at current levels.

“You should be gold already and enjoy the rally,” he said.

George Gero, managing director of RBC Wealth Management, said he believes it is only a matter of time before gold prices push back above $ 2,000 an ounce.

“Gold always has it all,” he said. “Beyond all the technical factors, there are still fundamental reasons why investors hold gold and why prices rise ”.

Tuesday’s markets will pay close attention to the US housing market as the US Census Bureau and the US Department of Housing and Urban Development release construction data for July.