Gold prices rose to fresh all-time highs on Monday, extending gains for the seventh day in a row already. Late last week, the bullion exceeded the $1,900 barrier and rallied to the $1,944 area in recent trading. Furthermore, despite the overbought conditions, the precious metal is expected to rise further and challenge the $2,000 figure as safe-haven demand persists.
The bullion derives strong support from the prevailing risk aversion amid rising US-China trade tensions, rising coronavirus cases, a weaker dollar, and mixed economic reports that cast a shadow on the outlook for global recovery from the pandemic crisis.
In the days to come, the yellow metal could gain further as the dollar will likely continue to lose ground as the Federal Reserve’s two-day policy meeting due this week could add to the selling pressure surrounding the greenback. The central bank may revise lower its economic projections and keep its monetary policy accommodative on Wednesday. If so, the dollar will keep bleeding, adding to positive momentum in gold prices.
Also, investors can’t shrug off concerns over the coronavirus pandemic as the number of cases continues to rise in several countries including the United States, China, Australia, Hong Kong, etc. Against this backdrop, second-wave concerns continue to persist, adding to other worries in the global financial markets.
As such, gold prices could target the $2,000 handle in the coming weeks. However, some consolidation is possible before another bull run as investors may take a pause and proceed to short-term profit-taking at the current levels. In this scenario, the potential pullback will likely be limited by the above-mentioned $1,900 psychological level first. In case of a deeper retreat, the $1,870 area could act as the intermediate support zone. Anyway, any technical correction will likely be shallow, with the overall trend remaining bullish now.