Gold price is fighting back, rallying 2% and reaching $ 2,000 per ounce

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(Kitco News) – After the fall of the mat last week, the gold market jumped back and fought teeth and nails to bring back the $ 2,000 ounce level.

The precious metals market has seen a surge of momentum after suffering its biggest weekly loss since March. December gold futures traded last at $ 1,989.90 an ounce, up 2% on the day. The yellow metal shot short to $ 2,000 before falling back.

While the gold market has been in the spotlight, some analysts have noted that silver should keep an eye on metal investors. Silver performed Monday with gold with prices exceeding 5% rallies during the session. September silver futures last traded at $ 27.55 an ounce.

Gold and silver saw consistently higher prices through the Monday session as a weaker US dollar and disappointing global economic data came in over the weekend.

Looking at gold, analysts have said that after Monday’s rally up to $ 2,000 an ounce will be the key level to watch this week as the precious metal enters a new consolidation period.

“Tuesday will be an important day for gold and we need to see if we follow anything by buying after today’s rally,” said Charlie Nedoss, senior market strategist at LaSalle Futures Group.

Nedoss added that last week’s sales, although significant, were a healthy correction for the market. He added that with a weaker US dollar and falling federal yields, he is not surprised that gold made a strong comeback at the beginning of the week.

Although bond yields started the day near a high of one month, they saw a steady decline on Monday afternoon. US 10-year yields were last traded at 67 basis points, more than 4% on the day down.

“This movement in the bond market is definitely a bullish environment for gold,” Nedoss said. “The question is: can this help gold break above its 10-day moving average at $ 2,000 an ounce.”

However, it is not only American markets that are helping the gold market to recover its lost ground. Bill Baruch, president of Blue Line Futures, said growing geopolitical tensions between China and the US created a win-win scenario for the precious metals markets.

Not only are China and the US nowhere near solving their trade and economic problems, but overnight the Chinese central bank launched more stimulus measures to support its faltering economy, which has been put under pressure by US sanctions and destroyed by the COVID -19-pandemic.

“These incentives are an enormous tailwind for gold,” Baruch said.

Baruch said he is currently considering support between $ 2,004 and $ 2,010 over the full term. As for investors having to play the current gold market, Baruch said investors should not pursue prices at the current level.

“You should already be in gold and enjoy the rally,” he said.

George Gero, managing director at RBC Wealth Management, said he thinks it’s only a matter of time before gold prices above $ 2,000 a year are pushed back.

“Gold still has everything for the purpose,” he said. “If you look at all the technical factors, there are still fundamental reasons for investors to hold on to gold and go up in price, ”

On Tuesday, markets will pay close attention to the U.S. housing market as the U.S. Census Bureau and the U.S. Department of Housing and Urban Development release construction data for July.