Gold Price Movement
Gold prices have risen sharply in recent times, but have now flatlined. This can be explained due to the recent worldwide scenario.
As a result of the COVID-19 outbreak, gold prices dropped as more and more entities started selling gold. However, gold prices recovered following the actions of central banks worldwide, which include deep interest rate cuts and massive financial packages to revive stagnating economies.
Another reason why gold prices could flatline in the near future is because of the massive upward rise of 27% starting from the beginning of the year to date. After the sharp fall, ensuing steep rise and the flatline over the past three months or so, it appears that gold prices have stabilized.
It has been noticed that the point of resistance is reached when a commodity, such as gold, approaches all-time highs or lows, that is, the value hardly moves beyond these extreme points.
As always, gold remains a key strategic component of any portfolio. Gold is known to absorb market uncertainty and freefalls quite well due to which gold is paramount during the unprecedented COVID-19 crisis.
Gold can help to protect your portfolio against the shocks of plunging stock prices, massive interest rate cuts and unprecedented geopolitical risk factors (like COVID-19), all of which are in full force in the present era.
Due to its relative stability and ability to bounce back even after taking hits from plummeting markets, gold remains a top performing asset during these uncertain times.
In the short term, gold prices may likely stall after maintaining record levels in the past few months.