As expected, gold prices continued to achieve gains and have reached to $1797 an ounce, the highest level for in nine years, and is now closer than ever to the psychological resistance of $1,800 an ounce. These gains came as the US dollar weakened and investors rushed to the yellow metal amid uncertainty over the pace of the economic recovery. The new confirmed COVID-19 in many US states and other parts of the world raised concerns about the possibility of another shutdown and thus a setback for global economic growth.
Silver futures have risen to $18.699 an ounce, and the white metal has exploded in recent months, rising 22% since mid-April. Silver prices have also increased 4% so far this year after falling for most of 2020. Meanwhile, copper futures rose to settle at $2.7970 a pound.
Many analysts warn that the latest upbeat data could be reversed in July, as the return of cases in some states will lead to another business shutdown. For his part, Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, said the United States has reported record increases in new cases of Covid-19 in the first five days of July, according to Reuters statistics.
Florida is once again closing its restaurants for indoor dining, gyms and other indoor places just weeks after it reopens. On the other hand, the US Federal Reserve official, Rafael Bostic, told the Financial Times in an interview that there are signs that the US recovery is "stabilizing."
Precious metals primarily benefit from concerns about the re-emergence of COVID-19, in more than a dozen US states, as the USA has reported a significant increase in confirmed infections, which has led to fears that this will affect the economic recovery. The increase in cases forced an increased concern from companies that the government might have to re-impose strict closures again, which would inevitably paralyze smaller companies and cause a stock market crash.
The United States of America officially has more than three million people infected and 133,000 deaths. Unlike other major countries, the United States did not level the curve, and instead saw a major boom. Most of the American cases are in the northeast in Florida, Texas, California and Illinois.
According to gold technical analysis: Bulls control of gold prices is still the strongest, but it must be taken into account the emergence of strong signals of the technical indicators reaching strong overbought areas, which may be followed by profit-taking sell-offs at any time. The $1800 psychological resistance is still a legitimate target for bulls, and the closest resistance levels are now 1812 and 1820. Sell-offs are expected to push prices towards 1784, 1772 and 1760 levels, respectively.
