Following a week of sideways market momentum, all eyes will be on the gold price again in the coming days. Several key events may spark a continuation of the 2020 bull run. It will be a very interesting week, regardless of how the market swings.
What to Look for Next Week
Macroeconomic events have a significant impact on the global monetary system. While some of these events can be nullified in quick succession, there are other factors at play as well. This year has proven to be incredibly challenging for all markets, yet the gold price has successfully bucked the trend for the most part.
This week’s announcements will certainly have a global impact. Germany’s upcoming quarterly GDP data won’t be positive in the slightest. The whole world has seen how the country dealt with COVID-19 and its fallout. Similar to other countries, the economic activity has contracted. In most cases, this will weaken the appeal of stocks.
In the US, most people want to keep an eye on the central banking conference by the Kansas City Fed. What this event will entail exactly, or what will be discussed/announced, is anyone’s guess at this point. There are some hints as to how the monetary policy will be reviewed, but that isn’t necessarily good nor bad news.
There is also an update on Japan’s Leading Economic Index, which may trigger a gold price surge. On Thursday, the US will also debate how they want to tackle the jobless problem, and whether more support can be granted. Closing the week is Europe’s consumer confidence report, which will undoubtedly depict some controversial information.
Gold Price Fundamentals Remain Solid
Regardless of what is going on in the financial world, the gold price often tends to follow its own path. More often than not, it remains a very powerful asset capable of retaining value and even appreciating under any circumstance. This trend has been very apparent this year, and even though there is a lull right now, things are looking to improve again soon.
It is always difficult to predict what the future will bring exactly. Based on some recent market predictions, seeing the gold price hit $5,000 per ounce becomes a possibility all of a sudden. Whether such a target is even plausible, is a different matter. Looking at what will happen net week, the situation will get very interesting either way.