Gold prices saw a huge rally as the yellow metal rose up to 14-months high on Friday.
The yellow metal has witnessed a strong rally in recent times. By the end of May, it broke above the resistance at $1300 ounce. The rally continued into June. On Friday, it went above its strong resistance level at 1350.
Gold prices rallied to higher levels on close on Friday as it touched levels of $1,358, the levels last touched in April 2018. Though gold is currently trading at $1,339 per ounce, if it breaks down below $1,338 per ounce, the metal may see a slump in its prices.
The FOMC will be meeting again this week and gold prices will move depending on the Federal Open Market Committee decision regarding rate hikes on Wednesday. However, analysts expect the U.S. central bank to keep its rates unchanged at 2.5 percent.
Paul Tudor Joes the billionaire investor has said that gold could rise up to $1700 per ounce. He says that gold is his favorite trade for another 1 to 2 years.
However, analysts say that it is strange that silver is not showing any momentum at all. Though silver has seen a slight rise, it has not crossed $15 per ounce.
The gold rally, however, looks overextended say analysts. Gold is showing bullish exhaustion signs.
As far as the long term and medium term are concerned, the economic slowdown caused by the trade war is causing a slowing growth.
Analysts say that demand for silver goes down, whenever industrial activities are hit. This was especially seen during the Great Expression. Though gold was able to retain its value, silver saw a huge slump during these tough times.
The global economy is now seeing a slow-down, especially in the U.S. and China. The stock markets are also jittery with the slowdown caused by the tariffs from the trade war.