How Far Can The Yellow Metal go? Gold Spot Prices Blink to 9 Years High

Spot gold was up 0.2% at $1,803 an ounce at 1.07 pm local time at London’s trading session, passing above $1,800 to reach the highest level since November 2011.

Gold has increased its momentum with the resurgence of COVID-19-related accommodative monetary and fiscal policies while geopolitical risks and trade reside on the backburner.

The massive monetary response to COVID-19 triggers gold to two huge bullish inputs: debts and liquidity

Global Investors rushed to safe-haven assets in 2020 as the COVID -19 viruses’ rages through global economies, triggering sustained inflows into gold-backed ETFs as global central banks unleash vast stimulus programs, thereby reducing the value of fiat currencies

“A massive investor response to Covid-19 has pushed ETF holdings to record levels, the impact of which has outweighed the decline in jewelry demand and absorbed increases in recycling,” said James Steel, chief precious metals analyst at HSBC Securities (USA) Inc. Further inflows are expected “as investors respond to elevated risks and low yields,” he said in a note.

As gold spot prices surpass the nine-year high trading above the $1 800 levels the bullish momentum will be pre-determined on how fiscal policyholders can curb the surge in COVID-19 cases, the bullion the bullish could push it to the $1,812 resistance level.

Considering the yellow metal’s strength to remain bullish since middle June positive, the upside for gold in the short term seems strengthened, coupled with the growing tensions between the two major economies that could see gold reaching $1850 levels before September.