The bullish rally in gold | 31 Juli 2020

The bullish rally in gold


#DAX30:


Euro zone business activity grew in July for the first time since the COVID-19 pandemic hit, as more parts of the economy that were locked down to curtail its spread reopened and people emerged from their homes to work and spend money. This is a positive signal for the German stock market! That unleashing of pent-up demand pushed IHS Markit's flash Composite Purchasing Managers' Index, seen as a good indicator of the bloc's economic health, to 54.8 in July from June's final reading of 48.5, its highest since mid-2018. Traders are still expecting a V-shaped recovery.


Trading recommendation: Buy 12800 and take profit 13110


The bullish rally in gold


#SP500:


Sales of new U.S. single-family homes raced to a near 13-year high in June as the housing market outperforms the broader economy amid record low interest rates. The real estate market is an important sector of the American economy! New home sales have now recouped losses suffered when non-essential businesses were shuttered in mid-March to slow the spread of the respiratory illness. New home sales are counted at the signing of a contract, making them a leading housing market indicator.


Trading recommendation: Buy 3210 and take profit 3267.


The bullish rally in gold


XAUUSD:


Gold prices have climbed by around 50% since the summer of 2018, when the metal bottomed under $1,200 an ounce. The rally comes on the back of low interest rates and trillions of dollars of Covid-19 stimulus passed by governments and global central banks that have debased the dollar and other conventional currencies and heightened inflation fears — a situation which investors typically hedge by buying gold. Gold’s strength has also been underpinned by a slump in the dollar this year. The Dollar Index, which measures the performance of the greenback against six major currencies, has slid steadily from 17-year highs of 103.9 in March to below 94.5 now, its lowest in almost two years.


Trading recommendation: Buy 1900 and take profit 1919

 

David Johnson
Analyst of «FreshForex» company
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