The price of gold didn't change much in August; however, there was a significant drop from August 6 to 9, due to strong employment data in the US. UU. Uncertainty about the end of the economic recession and higher inflation rates may push gold prices higher. Most likely, the future price of gold will continue to fluctuate within that triangle, in the range of 1680 to 1830 U.S.
dollars. This is because current economic conditions will give us a clearer idea of where the price of gold will go. The price of gold moves in response to macroeconomic and geopolitical factors, as it gains value during times of volatility in financial markets and global turmoil. All of these large-scale events increase both volatility and uncertainty in the markets, putting downward pressure on gold prices.
The World Gold Council (WGC) explained that this was due to the fact that domestic prices reached a record in a context of falling incomes in rural areas. On the other hand, a stronger dollar makes gold relatively more expensive for foreign buyers, possibly reducing prices. If the price of gold starts to fall and breaks last week's low, the correction will continue to fall to support (B) 1701 - 1692.When U.S. government bond yields rise, gold is likely to trend sideways or even downwards, while falling yields tend to cause very positive movements in gold prices.
The graph shows a long-term inverse relationship between the US dollar index (white line) and the dynamics of gold prices (yellow line). In recent months, the increase in the number of coronavirus cases, the increase in global tensions and the general economic slowdown have led to a steady increase in gold prices around the world. By placing the Fibonacci grid on the gold price pattern, we will see some stages of development of the lifespan of the gold trend. By way of example, it is shown below that China and India (with strong economic growth) have become the main buyers of gold over the past two decades to invest and create reserves and, therefore, have given additional encouragement to price increases.
Gold is not only known for being a factor that diversifies portfolios, but because fears of inflation are increasing, investors tend to turn to gold because it is considered a good hedge against rising prices.