It is evident that the precious metal markets have come under a bit of short-term pressure. Given the global events taking place – both the coronavirus and other developments – this trend should not disrupt the expectations for Q4 2020.
Gold Price Volatility Spikes are Normal
Anyone can’t really stomach for volatility spikes – either short-term or long-term – may not be suited for investing. No market can remain stable or appreciate in value every single day without meeting some sort of resistance and pushback. That applies as much to precious metals as it does to cryptocurrencies, stocks, bonds, and treasuries.
As far as the current gold price is considered, it seems as if volatility will remain in place during Q2 2020. Entirely normal, as the coronavirus crisis continues to disrupt both demand for and production of precious metals on an unprecedented scale.
It is equally important to look at this market from a proper time frame. A daily price chart will obviously yield more and bigger swings in terms of valuation. When looking at a weekly gold price chart, there is absolutely no reason for concern. Both overviews confirm that the push to $1,700 may have been delayed slightly, but it remains well within the realm of possibilities.
In fact, the overall gold price trend for 2020 remains fairly bullish. Barring the major drop to the low $1,450 range a few weeks ago, it is safe to say that gold has recovered fairly well. Currently, the price is near the same levels as early February, indicating that a strong push later in the year remains very likely.
Precious Metals Analyst Agrees
A recent report shared by Natixis precious metals analyst Bernard Dahdah confirms there isn’t much to be worried about. While the current friction caused by the coronavirus pandemic will trigger more volatility, the gold price has proven to be very resilient, overall. It will take time before demand increases again, yet precious metals remain a safe haven for investors regardless.
Another interesting aspect highlighted by the report is how the US trails Europe. More specifically, there are genuine expectations of seeing further drops in the US equity market. Further downside in that market is very plausible, which may have some interesting effects on the gold price overall.
Eventually, Dahdah mentions, the value of gold per your ounce will reach $1,900. In his opinion, that will happen at some point in Q4 2020, although it’s difficult to go into further specifics. An average of $1,850 per ounce during that entire quarter is, according to Dahdah, very likely, which would certainly elevate the yearly average for 2020.