「KOL Analysis•Jasper Lo」Is Gold Price Strong Enough to Soar?

With a gradual rise in gold price, people in the financial market keep holding a positive sentiment on gold. Whether the gold price will soar definitely or not, I think that there are still some factors which need to be taken into consideration.

The gold market recently is filled with positive factors, such as global central banks released large scaled quantitative easing policy and cut down interest rate, even with the probability of negative interest rate in the future. And the risk aversion sentiment in financial market is also a main reason for the upward trend of gold price.

Risk aversion sentiment includes the following three aspects:

Firstly, investor are seriously concerned about the reappearance of the US-China trade war due to the deterioration of the relationship between this two countries.

Secondly, the currencies of emerging market economies depreciate sharply, triggering, to some degree, currency and debt crisis.

Thirdly, affected by COVID-19, investors also start worrying about the unrest in some countries or regions, which may lead to geopolitical tensions.

On the other hand, some unfavorable factors to which everyone should pay attention are hidden behind the rise of gold price.

Firstly, the trend of a strong dollar. The continuous strong dollar may weaken gold prices power to go up. So the gold price may drop due to a super strong dollar, for example, affected by the super strong US dollar index on March 9th, the spot gold price slumped from the high level of 1703 dollars to 1451 dollars.

Secondly, the high probability of big recession in global economy. Under this stress, the prices of basic metals and commodities dropped to different extent. On the one hand, basic metal‘s price may drag down the performance of gold price. One the other hand, the fall of global commodities’ price may lead to deflation, which could potentially slow down the upward trend of gold with anti-inflationary capability.

Thirdly, although gold ETFs holdings are increasing, global central banks dose not increase their gold reserves. So I'm concerned that some countries may sell some of their gold reserves for emergency use. As we all know, some countries have already used lots of foreign currency reserves.

In the short run, spot gold price‘s resistance levels are at both 1785 and 1795 dollars. So be careful with these two levels’ pressure on gold price. And I‘m still cautious and optimistic about the gold market in the future. But there is a high probability of situation of rising first and then falling sharply. So I will focus on two support levels, 1703 and 1659 dollars, for gold’s correction.

[About The Author]

Since 1987, Jasper Lo has been engaged in the financial industry (forex, futures and gold) for more than 32 years and holds forex R.O., securities and futures broker licenses. Mr Lo is an expert in trading forex, precious metals and commodity futures and an basic and technical analyst.

Over the years, Mr Lo won many individual and team sales champion awards, as well as outstanding employee awards. He was invited, as a guest mentor, to the University of Hong Kong, Guangdong Ocean University and Guangzhou Jinan University. And he was also appointed as the chief training consultant by Hantang Securities and Dongguan Securities in China.

Mr Los experience as guest of honor invited by media including Chinese and English newspapers and columnist:

-Guest of honor invited by TVB New Channels such as Finance Channel, Forex Focus, Global Watch

-Guest of honor invited by Now Finance Channel - Forex Reports

-Guest of honor invited by i-CABLE Finance Info Channel - Forex Opportunities

-Guest of honor invited by ViuTV - Investor Smarter Group

-Columnist of Finance and Forex Market of Ming Pao

-Presenter of Finance and Forex Forecast of Ming Pao

-Presenter of Investment 36 Stratagem and Technical Analysis in 1 Min of Ming Bao Finance

-Appointed lecturer of Ming Pao Investment Seminar and Paid Course

-Author of the best seller Investment 36 Stratagem

-Columnist of Forex Expert, Forex Analyst, Marathon Weekly of ET Net

-Guest of honor of Open Good Morning of ET Net

-Guest of honor of Metro Finance Channel - Market Opening, Instant Market Fighting, Guangdong-Hong Kong Finance, Finances Power, Market Analysis

-Guest of honor of New Era of Investment of RTHK

-Columnist of Capital Commodities of Capital Weekly

-Guest Presenter of Wang Guanyi Online Finance Channel - Fund and Commercial Bond

-Columnist of Wealthub Finance and Investment Smart Platform of Enrich Culture

-Guest presenter of Weekly Investment in the World of Enrich Culture

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