Should Gold Sell “Cut Loss” or Hold? | Finance – Business

09/27/2020 Business, World



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Last week, the global price of gold fell by around 5%, the strongest drop since March 2020, when the Covid-19 epidemic broke out in the world. Currently, gold is at more than $ 1,864 / ounce.
Domestically, the price of gold on September 27 was trading at approximately 55 million dong / volume bought and 55.6 million dong / volume sold, more than 4 percent less than at the beginning of the week. Compared to the peak of almost 60 million dong / tael, if the investor “embraces” each amount of gold, the loss is about 4 million dong / tael.
The question that most worries investors at the moment is whether gold will continue to fall, should it be sold to reduce losses or wait for the price to rise again? The main reason for the fall in gold prices, as the dollar has risen sharply in recent times because concerns about the global growth outlook have reinforced the currency’s appeal as a safe haven, reducing demand. demand for gold.

In the short term, gold will remain under pressure to lower prices due to psychological factors. Specifically, the support levels will be $ 1,885 / ounce, $ 1,815 / ounce.

Should the gold sell

Gold buyers last week lost more than 4%

“We believe that the downward pressure is likely to continue over the next few days, when a strong bullish move begins. If gold finds support near $ 1,885, then we could have created a bottom in gold, establishing a massive uptrend, ”said Chris Vermeulen, an international technical analyst who works regularly. with Kitco, Bloomberg… he commented.

According to this expert, if gold bottoms out around $ 1,885 / ounce, the next bullish move will push the target higher by almost $ 2,250 / ounce.

Will successful fund creation skyrocket to $ 2,275 / ounce?

Regarding macroeconomic factors, some financial institutions around the world also stated that the long-term prospects for gold remain intact as “real interest rates” are expected to remain negative in the near future. With the Fed maintaining its “extremely loose” monetary policy until 2023 while allowing inflation to rise, this will gradually push gold higher with a target of $ 2,275 an ounce.

According to RBC Capital Markets strategist Christopher Louney, any escalating conflict during the elections will help drive up precious metal prices. “The US electoral cycle and any potential transitions, as well as increased geopolitical tensions, remain amid economic uncertainty,” he said in a note. The recent movements open space for gold to physically increase ”in the next 2 quarters.

“The global economic recovery will ensure more stimulus as the Northern Hemisphere faces the winter wave of Covid-19,” also predicted Edward Moya, senior market analyst at Oanda.

Finally, according to experts, over the decades the abuse of fiscal stimulus has culminated in a boom in public debt. Central bank interventions that have supported and facilitated reckless government spending have disrupted the fundamentals of growth.

Rather than laying the foundation for real future economic growth, monetary regulators have fostered an exciting investment climate with misleading asset valuations. The severity of this long-term macroeconomic imbalance helps lay the groundwork for an extremely optimistic outlook for precious metals, especially relative to the equity market.

Therefore, for short-term surf investors, the psychological pressure is very high, so risk management through stop loss should be placed on top. However, for long-term, persistent and confident investors in holding gold, holding gold can still generate attractive returns.




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