When Will Gold Rise Beyond 1500 USD?

Over the last year, dollar was doing very well, which limited increases in gold prices. However, temporary weakness of the American currency was enough for that metal to immediately rise to its 6-year high.

Resistance defeated

As a reminder: after soaring to an all-time high in 2011, gold cost 1950 USD. In the following years, the metal was becoming cheaper and reached its low at the turn of 2015 and 2016. At that time, the price of one ounce of gold was 1050 USD. Since then, yellow metal started to get more expensive, but over the next 3 years was not able to break 1360-1380 USD level.

source: Sourav Saha

A few days ago this barrier was finally breached. This is important because some investors or speculators take the given asset into consideration only when it breaks the so-called resistance level. In the case of gold, this was aforementioned 1360-1380 USD.

Involvement of additional market players has triggered gold to continue its rally, even reaching 1440 USD for a moment. Eventually, the closing price was about 1420 USD. Anyway, we're talking about an increase of almost 12% in just over a month! In the case of gold, it's a really huge move.

source: stockcharts.com

Over the last 2-3 days, gold price has been catching its breath and has fallen a little, which does not change the fact that it is at its highest price from 6 years.

Paper price of gold

Before we consider gold prospects for the following weeks, a small explanation for those who have not read Trader21 older articles. It explains how to set the dollar price of gold, which we see on all investment portals on daily basis.

Gold price is largely dependent on what happens on the stock exchange (so-called Comex). Gold trading at Comex has very little to do with real metal exchanges between stakeholders. It comes mainly to trading certificates that imitate gold. As a result, at Comex, there are contracts trading worth tens of millions of ounces of gold, and in fact, in Comex stores (as collateral) there are only several million ounces, of which only a small part can actually be delivered. The rest is the metal which belongs to banks and could not be used for settlement.

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