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Gold Pared Gains at $1,550, Will It Explode? Expert Believes in $1,900

XAU/USD is currently trading at 1,540, 0.53% negative on the day. The hourly chart looks bearish in the short term, but some signals of recovery are appreciated in the technical indicators.
Mauricio Carrillo
Gold Pared Gains at 1,550, Will It Explode? Expert Believes In 1,900
Gold Pared Gains at 1,550, Will It Explode? Expert Believes In 1,900

Gold will jump to 1,900 and a lot higher.

Hi FX Emperors, Canadian Billionaire and chairman of Leagold, Frank Giustra, affirmed in a recent interview that gold would explode in the future as the world is facing dark economic times ahead.

“I think we’re in the third and final phase of the gold market that’s started in 2001, and this will be the most explosive phase for gold,” Giustra told Kitco News this week.

Asked about an XAU/USD forecast, Giustra said that gold would reach 1,900 in the next months and a lot higher, but it depends on a lot of things. “It will be reckless not to have gold in your portfolio.”

According to Giustra, “the world is in uncharted waters right now. We’re living in a world with a global debt bubble, and any time you get debt bubbles of this magnitude that are global that are fueled by speculation, something’s going to happen” he said.

When is all this going to happen? Giustra said that the signal for the beginning of the bull rally in gold was the Fed’s reversal policy from hiking to lowering rates this year.

Will it explode? Certainly not today

Gold is trading negative on Wednesday as investors are cheering news from Hong Kong as leader Carrie Lam said that she will withdraw the extradition bill that sparked mass protests months ago.

On the other hand, the UK Parliament voted against the British Prime Minister Boris Johnson plan, and it opened the door for another Brexit delay. It helped the Pound and global risk interest.

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Gold pared gains at 1,550

XAUUSD 1-hour chart Gold September 4

Gold is trading negative on Wednesday after two days of gains; however, the unit remains moving inside the range it has been in the last eight sessions.

The metal tested the 1,550 level overnight, but the unit was unable to break above the resistance. Then, it started to fall until it found support at 1,530 in the American morning.

XAU/USD is currently trading at 1,540, 0.53% negative on the day. The hourly chart looks bearish in the short term, but some signals of recovery are appreciated in the technical indicators.

To the upside, the unit needs to consolidate levels above the 1,540 price and then launch a new attack for the 1,550 area. Above, August 25 high at 1,555 is waiting for bulls.

To the downside, supports are at 1,530. Below there, check for more buying interest at 1,520 and the psychologic 1,500.

Silver extends rally and test prices above 19.50

XAGUSD 1-hour chart Silver September 4

Silver is trading positive for the fourth straight day on Wednesday as investors are buying the metal on a speculative movement and an alternative to gold.

Earlier in the day, XAG/USD jumped to trade as high as 19.60, near two-year highs. However, the unit couldn’t sustain gains, and silver started to consolidation to the downside.

XAG/USD found support at 19.20 and it is now testing the 19.40 area again. Currently, silver is 0.45% positive on the day at 19.35.

TD Securities head of global strategy Bart Melek believes that can be at $25 by Thanksgiving.

“Silver is catching up here. It is getting a bid from gold. The U.S. dollar fell a bit. Rates again dropped significantly, and equity markets went into flux. Essentially what it meant to us is that we will get our $19-$20 silver target quicker,” Melek told Kitco.

Melek considers that above 1,560, gold will jump until 1,600 quickly. Then, silver will be able to reach levels not seen in years. “The gold-silver ratio has taken a dramatic turn lower. A more normalized level for the gold-silver ratio is in the 60s. Silver can easily achieve $25 by Thanksgiving.”

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