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The technical aspect of contraction in the fluctuating area of gold price is on the upward side.
Sep 16,2020 15:46CST
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SMM News: the gold market continued to fluctuate this week, falling back after a high test of 1970 US dollars / oz, showing strong resistance.

However, Lukman Otunuga, a senior research analyst at FXTM, said that the volatility area of the gold market is shrinking, and from a technical point of view, gold prices are more inclined to the upside.

Otunuga believes that at present, all kinds of fundamentals that are good for gold are still there, so it is difficult not to be bullish on gold.

These fundamentals, including economic uncertainty surrounding the epidemic, geopolitical risks and stock market risks, have boosted the safe-haven demand for gold. In addition, rising inflationary pressures will also push up the price of gold.

"the Fed's adjustment to an average inflation rate of 2% means that inflation can rise above 2%, which means that interest rates will remain low for a long time, which is good news for gold."

Otunuga said a possible correction in the stock market would be a driver of gold's next rally. Today, the whole market is addicted to Fed loose stimulus, but even if so much liquidity is injected into the market, the true state of the economy will sooner or later make investors realize.

U. S. stocks fell more significantly last week.

"if risk aversion continues to be a key theme in the market, then it is good for gold."

In addition, the performance of the dollar index is also a major factor affecting gold, the dollar index has rebounded recently after previous declines, but the overall weak performance is also a big positive for gold.

"the upside of the euro has been blocked in the medium to long term, but it will rise in the short term, and it is very difficult for the dollar to rise under pressure on the global economy."

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