According to experts, the yellow metal market has shown an upward trend over the course of several weeks. The long-term key level of price resistance was overcome, which allowed investors to actively invest in precious metals. This opened up opportunities for rising gold value.
The situation was also influenced by the actions of the world's leading central banks, following the policy of lowering interest rates. Recall the next Fed meeting on monetary policy on Wednesday, June 19, it was decided to keep rates at the same level but eight members of the committee admitted the possibility of reducing them in the near future. According to analysts, low interest rates increase the attractiveness of non-interest-generating assets, which include the yellow metal. Most global regulators have a low or negative interest rate policy. As a result, the gold rate received significant support from leading central banks, lowering their interest rates.
Recall that for 1 ounce of gold they gave $1343 recently. However, on Thursday, June 20, the yellow metal rose in price by 2.6%, reaching a six-year high of $1,394 dollars per ounce. As a result, the value of gold turned out to be very close to the psychologically important mark of $1,400.
For several years, the course of the precious metal could not overcome the level of $1,350 per ounce but now it has exceeded the six-year resistance line as a result of a sharp rise. This allowed gold to come close to the next level of $1,400 per ounce, experts say.
At present, the volume of shares of gold exchange-traded funds has reached the highest monthly figure since January 2019, according to Bloomberg. Analysts say, the gold exchange rate may exceed $1,400 in the event of increased economic and political instability and further escalation of the trade war. One of the important catalysts for the appreciation of the yellow metal is the decline in real interest rates in 2019, experts sum up.