Jakarta, CNBC Indonesia – The world gold price finally shot up again in Monday’s trading after being depressed all last week. This precious metal successfully moved away from its lowest level in the last 2 weeks, and returned to approaching US $ 1,900 / troy ounce.
According to Refinitiv data, yesterday gold shot up 1.12% to US $ 1,880.85 / troy ounce after slumping 4.6% over the past week. The increase in world gold also raised Antam’s gold price in the country today.
While today, Tuesday (29/9/2020), at 18:23 WIB, gold strengthened again by 0.28% to US $ 1,886.88 / troy ounce.
The United States dollar index (US), which yesterday fell 0.38%, fell from its strongest level in the last 2 months to trigger the strengthening of world gold. The index which measures the strength of the US dollar until this afternoon also fell 0.13%.
In addition, Nancy Pelosi, Chairman of the US House of Representatives from the stronghold of the Democratic Party, said that they had prepared a bill for a further stimulus package for Covid-19 assistance worth US $ 2.2 trillion. However, he did not explain when the voting would take place.
Reuters reported that the new stimulus package would include assistance or funding for schools, restaurants, SMEs, workers in the airline sector and several other sectors.
Fiscal stimulus is one of the fuels for gold to move up.
Gary Wagner, editor of TheGoldForecast.com provided his analysis regarding the increase in gold.
“Gold rose US $ 18, the most important thing for me is not the highest level today (yesterday), but the lowest level intraday in the morning when it touches moving average (moving average) 100 days, “said Wagner as reported by Kitco, Monday (28/09/2020).
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Chart: Gold Touches 100 Day Moving Average (Purple Line) Foto: Refinitiv – – |
According to Wagner when it touched moving average Those 100 days sparked action short covering as well as mentality buy on dip (buy when it goes down) which makes gold prices go up again.
“For me what we see today (Monday) against gold is relief after last week’s sell-off,” he said.
Wagner also does not recommend selling gold when it is strengthening as it is currently.
“Personally, I believe buying gold during a breakout rather than selling when the price is rising. There are 2 important things that we saw from the movement of gold on Monday. First, the fact that gold touched a level moving average 100 days later turned up, the second is gold is at its highest level on Friday and Thursday, “said Wagner.
Meanwhile, the world-class investment bank from Switzerland, UBS Global Wealth Management, said now is the right time to place funds in gold instruments.
Investing in gold is considered to be an excellent place to go ahead of the US presidential election, UBS told CNBC International.
“We like gold, because we think gold is likely to actually hit around US $ 2,000 an ounce by the end of the year,” said Kelvin Tay, UBS Regional Head of Investments, quoted Tuesday (29/09/2020).
“And gold has a certain hedge,” said Tay.
“In case of uncertainty over the US elections and the Covid-19 pandemic, gold is a very, very good hedge. And its recent weakness is a great entry point for investors,” he added, speaking at CNBC’s Squawk Box event.
CNBC INDONESIA RESEARCH TEAM
(pap / pap)
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