Gold price projections in May 2020



According to the model developed by the AXL Capital Management team, this report issues the projected levels of Gold prices for May 2020.

For May 2020, the model indicates a lower limit of US $ 1,619 / 0z, and an upper limit of US $ 1,787 / Oz, the latter represents the maximum value since November 2012.

When analyzing those results with technical price indicators, the conclusion made that if the upper lateral channel of US $ 1,742 / Oz breaks, the next level projected by the model is feasible to reach: US $ 1,787 / Oz.


Chart # 1: The daily chart of the price of Gold shows a side-channel whose upper level is US $1,742 / Oz, and the lower level is US $1,671 / Oz.

The US economy is reopening in many states, a slow recovery of jobs expected, which at the date of this report reaches a record historical figure of 33, 483,000 jobs lost from 03/21 to 05/02 (Data, Federal Reserve Bank of St Louis). That figure represents almost the entire Peruvian population.

Currently, there is no cure for COVID-19, and the possible vaccine is estimated to be ready by the end of the year, the number of infected and deaths continues to increase more than expected, which is why the world economy and health would have an impact negative. In this situation, together with slowed macroeconomic indicators in the USA, could lead to Gold at the projection level of the AXL Capital management model: US $ 1,787 / Oz.

The monthly tracking of gold prices from January 2018 to April 2020 in the upper and lower ranges, the closing prices of exchange to each month are within the estimates. To date, the model operates within its 90% levels of trust.


Graph # 2: Tracking model results vs. real Gold price data, monthly close (10 am LBM) January 2018- April 2020.

The revision of the estimation error of the average issued by the AXL Capital model for the month of April 2020 versus the real average reported by the LBM (10 am) is -2.2%: the US $ 1,646 / oz vs. US $ 1,683 / oz. This is within the model's error acceptance range.


Conclusion

AXL Capital Management's econometric model projects a higher level for Gold prices of US $ 1,787 / Oz. This figure may be achieved by dividing the value of US $ 1,742 / Oz.

The effects of the virus crown and the paralysis of the world economy are generating slower macroeconomic data, and that could lead the way to the next world economic recession in case the re-opening of the economy in the USA and worldwide is restricted by an outbreak of COVID-19.


For May 2020, the upper level of the model estimates is 1,787 US $ / Auoz.
For May 2020, the lower level of the model estimates is US $ 1,619 / Auoz.
For May 2020 the average would be: US $ 1,697 / Auoz.


Yro S. Cortez Ramos
Mining Business Development Manager
AXL Capital Management
yro.cortez@axlcapitalmanagement.com


Disclaimer: The results issued by AXL Capital Management are carried out with a deep level of analysis, however, they are subject to potential global macroeconomic variations that have a high level of uncertainty, so those results must be used only for information and do not represent purchase recommendations. / sale or short, long-term investments for the global Gold market, its derivatives, ETFs, or shares of mining companies or any other type of investment.
Ubicación: Chile

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