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Gold Price Today July 24: Poised to reach all-time high and investors aren’t afraid 

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10:08 | 24/07/2020

As the dollar continues to slide, the yellow metal is experiencing higher prices and continue to rally Thursday. Gold prices are also under upward pressure when the rate of unemployment in the US has hiked due to Covid19.

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According to Forbes, gold prices are extending their gains and currently trading at $1,875. Gold price is up nearly 23% year-to-date. The positive trend in the gold spot prices is chiefly due to the escalation in the geopolitical tensions and uncertainty over the second stimulus package. Investors aren’t afraid of the gold price reaching a record high ($1,921), and there is clear evidence that backs this argument.

gold price today july 24 poised to reach all time high and investors arent afraid

U.S. China Tensions Supports Gold Price

The U.S.-China tensions escalated further yesterday when the U.S. ordered China to close its consulate in Houston. China has confirmed it is going to react with equal retaliatory action. This tit-for-tat action has made investors nervous, and some are hesitating to back the U.S. equity markets. This is despite the fact that the S&P 500 has erased its year-to-date losses.

Uncertainty Over Second Stimulus Package

Gold traders are also betting on the yellow metal price because there is uncertainty about the future of the U.S. unemployment benefits program. It will expire this month, which means that Americans will no longer get the extra $600 support in terms of jobless benefits. The debate is on in Washington about the second stimulus round that could include jobless benefits and stimulus checks for Americans. However, so far, it appears that politicians are playing politics, and there may not be any outcome by the end of this month.

Stimulus Addiction

Gold traders are considering this a risk-off opportunity, and they know that the current coronavirus stock market rally will crash in the absence of another stimulus support package. This has brought more interest in the gold prices. Even if the current stimulus package gets the green light from Washington, traders do know that it will only provide a tailwind for the U.S. equity markets for some time, and eventually, the U.S. equity markets will stall again.

Basically, the U.S. economy and the U.S. equity markets have become addicted to the stimulus; it relies on the fiscal stimulus and monetary policy measures. As long as it gets these in some form, traders are ready to push the U.S. stock market higher. However, the skeptics are not happy, and they do not believe in this rally. This is why we keep seeing more interest and new money flow in gold ETFs.

Technical analysis

Fxemprire reported that gold prices finished at 8-year highs and continue to accelerate higher. Target resistance is now seen near the August 2011 all-time highs at 1,912. Support is seen near the 10-day moving average near 1,833. Medium-term momentum has reversed and turned positive as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices.

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Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast-stochastic is printing a reading of 94 above the overbought trigger level of 80, which could foreshadow a correction. The RSI also surged higher reflecting accelerating positive momentum and is printing a reading of 80, above the overbought trigger level of 70 which could foreshadow a correction.

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