On Thursday gold hit another price record by reaching the level of $1684.9/oz. On Friday the price of gold retraced down to $1649.7/oz and then slightly recovered by reaching $1673/oz.
Therefore, gold has just come close to the upper border of the 3-year bullish sloping channel. Gold is stable while its volatility is high.
S&P’s cut the US credit rating. Numerous countries around the world show poor economic results. That is why investors will probably need more gold to ensure against currency risks, thus seeing gold as a safe haven asset.
Some investors and traders assume that gold will exceed the level of $1700/oz. Being concerned about the current pace of the global economic growth, UBS has already increased its forecast from $1575/oz up to $1725/oz.
According to the Department of Commodity Trading, , there is another factor that supports gold prices: Q4 is usually the time of higher demand for golden jewelry. That is why the demand for physical gold in August increases while there is no increase in the market supply. Eventually, it will end up in higher gold prices.
