[Hassam]

For thousands of years , gold has been used as a store of wealth. Human imagination has always considered gold to be a very precious commodity. Some primitive societies considered stones also as a store of wealth but overall human history has been revolving around gold and silver. Kings would demand gold as payments. Gold is considered to be a safe haven meaning when we have political turmoil, wealthy people tend to save their wealth in gold rather than US Dollar or for that matter any other currency. Today gold has very little industrial use but it is still used as a store of wealth. China and India are two countries that have massive demands for gold. Since COVID-19 started early this year, gold has been on the march. Take a look at the following chart.

   

Now as you can see gold technically XAUUSD has been on the rise for the past many weeks especially since the COVID-19 pandemic started. One of my friend phoned me and asked me how high will gold rise. He had heard from someone that gold will go above $4K. He was planning to buy gold. I told him give me a day. I looked at the charts. Gold had hit the high price of $850 in 1980 due to high oil prices, Soviet invasion of Afghanistan and overthrow of Shah and the revolution in Iran.In todays dollars it is around $2800. In 2011, XAUUSD hit another high close to $2K before it crashed and went below $1K and then traded between $1K and $1.5K for some years. $2.8K is an important resistance level that gold has not broken in the last 50 years. So I told my friend gold price can go till $2.5K at most. Predicting a gold price of $4K is wide off the mark. Take a look at this XAUUSD chart.

   

In the last few months, gold has been rising due to COVID-19 fears and global political uncertainty. In the above XAUUSD H4 chart, you can see how gold fell on the announcement of COVID-19 vaccine by Pfizer.