Spot gold set the year’s record daily closing price on Wednesday. Following this, the precious metal continued to trade at higher levels. Some analysts predict the strength will likely extend into the new year.
“A quiet and slow Forge for gold would surprise me!”
Gold looks set for a bit of a reality check after the rally above $2,100 faded rather quickly in the first week of December, according to Justin Low, currency analyst at ForexLive. After this, the gold price fell below $2,000. However, the analyst says that the gold bugs definitely saved the situation by making a record close this week. Evaluating the rise of gold from $1,982 on December 13 to over $2,088 yesterday, Low makes the following statement:
The improvement in liquidity conditions may still cast some doubt on the recent rally. However, there are still good arguments for gold to rise further as 2024 approaches. The seasonal tailwind in January is probably one of the strongest arguments for a higher extension. (…) From what I see, gold is currently preparing for one of two things. We will either start the new year with new records or experience a significant decline before buyers refill their long positions. All things considered, I’d really be surprised if we had a quiet, slow January.
Justin Low remains reticent to predict which outcome is more likely. “I hate to read too much into subtle liquidity movements like we saw at the end of the year and this week,” the analyst said. says. Therefore, the analyst still has some reservations about the week’s highs for gold.
The most likely scenario for the shiny metal is upside
Other analysts look beyond liquidity concerns to geopolitical and macroeconomic environments. Both indicate that gold prices will continue to strengthen, with the potential to reach all-time highs in January. At Investing.com, analyst Damian Nowiszewski talks about the most likely scenario in the current context. Accordingly, it indicates an upward trajectory, with the first target being around $2,100. In this regard, Nowiszewski makes the following comment:
Recent strong demand has created a new historical high for the gold price in the $2,150 area. However, these were quickly rejected. However, buyers do not experience fuel shortages. Moreover, all indications are that they could permanently surpass the key resistance area located near the $2,100 round barrier, which has been tested several times over the past few years.
According to Nowiszewski, the natural target for the shiny metal is the area around $2,150. Moreover, the next round barrier of $2,200 remains on target. “Possible corrective moves for gold will be limited to the local uptrend line and demand zones around $2,000 and $1,950,” the analyst said. says.
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