Gold has seen strong growth momentum after traders sought refuge in gold as oil prices have fallen sharply in recent days. Demand for safe harbors continues, intensifying the oil collapse. In 2020, the price of WTI oil fell by 67% and Brent oil fell by 73%. Oil-producing countries whose currency correlates with the price of oil are likely to seek to be less dependent on oil development, diversify their foreign exchange reserves and obtain physical gold, as do the people in these countries.
As central banks increase their balance sheets to curb economic downturns, a number of risks could be effectively socialized, increasing the attractiveness of gold. Based on this, the target price of gold, according to Bank of America, increased from $ 2,000 to $ 3,000 per ounce at the 18-month horizon.
The current positive correlation between stocks and gold is a possible sign that stock markets may not have reached their bottom and the gold market still has a lot of room for growth. The trigger could be a persistent pandemic and the associated possible extension of blocking restrictions over the next few weeks.
Disclaimer: The content of the Reports constitutes Marketing Communication and does not constitute Investment Advice or Investment Research or an offer for any transactions in financial instrument. The content of the Reports represents the view of our experts on a generic basis, and does not take into consideration individual readers personal circumstances, investment experience or current financial situation. In addition, the Reports have not been prepared in accordance with legal requirements designed to promote the independence of Investment Research, and are not subject to any prohibition on dealing ahead of the dissemination of Investment Research. Readers using the Reports should consider the possibility of encountering substantial losses. The past performance is not a guarantee of future results. Therefore, Goldenburg Group Limited shall not accept any responsibility for any losses of traders due to the use and the content of its Reports.