Why do banks buy gold again?

By 29/06/2020News
Morning Stock News

Gold   1693,50

EURUSD   1,0799
( -3,73%)

DJIA  24115

OIL.WTI  25,095

DAX   10609

Last trade week showed that the economy is far from recovery. The fears are only growing. Macroeconomic statistics are getting better every week and increasing investors’ confidence in the recovery, but more and more questions arise as to what will happen if the coronavirus does not retreat, but returns with even greater force.

Dow Jones

Dow Jones

What happens if the second wave comes, nobody knows. But countries are taking down the isolation and trying their best to get things back to the way they were. In any case, the economy will gain momentum and the financial system will become more stable. This week does not contain any significant events. Investors will continue to watch the pandemic situation. On Friday the S&P500 index fell by 2.4% and closed at 3009 and came to the important level of 3000. The DAX index closed 0.79% lower, at 12089.


The EUR/USD pair closes on Friday at 1.1217 near the lower boundary of the trading range. There is no clearly defined trend yet. It remains to observe how the exit from the sideways will take place. At the current stage the bulls have more chances to break through the level of May highs at 1.14. The economic situation in Europe is improving, which gives reason to buy the Euro.


Friday ends for gold with excellent growth to $1769 per ounce. The next rally is likely to target at $1850 and above. Some banks have already started building up their gold reserves heavily, apparently preparing for another wave of crisis. Usually, banks, using their statistics, are among the first to feel the approaching problems. Buying gold will allow them to save their assets and stay in difficult economic situation. Such purchases can greatly increase the price of gold up to $2100 per ounce and above. Meanwhile, the bulls are gathering strength to storm the level of $1850 and above, which will be a breakthrough of the psychological barrier.

What’s waiting for us today?

01.50 Retail sales volume in Japan since the beginning of the year
14.00 Consumer price index in Germany for June
16.00 US Real Estate Work in Progress Index for May

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