Spot gold opened the Sunday evening session with great momentum. In this move, it shattered key resistance levels and the previous high to reach the all-time high of $2,148.99. However, gold prices later lost altitude and started to decline.
2024 target for gold prices: $2,534
Gareth Soloway, Chief Market Strategist at InTheMoneyStocks.com and President of VerifiedInvesting.com, says this move is driven by a strong combination of rate cut expectations and technical levels. The strategist makes the following statement:
Gold rose to an all-time high thanks to the expectation that interest rates would fall sooner (be higher for longer), expectations of future money printing, and stops triggered by the break of $2,100. An inverse ‘head and shoulders’ formation has been triggered (assuming a daily close above $2,080).
Soloway says the target calculated for 2024 is $2,534. He also notes that this would indicate that the breakout of the inverted head and shoulders pattern has been completed. According to the strategist, investors will likely prefer gold as a way to hedge against recession, inflation, money printing and the classic security trade.
Gold made mincemeat of the previous record, but…
CityIndex and Forex.com market analyst Matt Simpson says investors should be cautious about what this move means for gold prices, as it occurs while liquidity is low. The analyst shares the following assessment:
Gold made mincemeat of 2022/previous record high. It rose to $75 at the open and moved above the 1-week implied volatility band. Expect plenty of gold headlines. However, I am skeptical of this move as it occurred during low liquidity trading.
Simpson admits he completely missed this move in gold. But at the same time, he says he’s content to sit on the sidelines. He also notes that he is happy to avoid the inevitable decline that will follow.
Fed comments strengthen gold price rally
cryptokoin.comAs you follow from , gold’s rally started to gain momentum in October. Afterwards, it became even stronger with Fed Chairman Jerome Powell’s statements regarding the restrictive state of monetary policy. These comments led to declines in both the dollar and Treasury yields. Thus, it benefited gold. However, Powell warned against premature expectations of policy easing, despite market speculation that a rate cut would be made by May.
Gold prices fell from session highs on Monday. Perhaps it reflected the market’s reaction to Powell’s signal that the Fed was in no rush to cut rates. This sentiment was reflected in the Treasury market as the 10-year yield rose. Upcoming US labor force data, which is expected to show payroll increases and stable unemployment rates, could further influence gold’s direction.
Short-term outlook for gold prices: Strong upward trend
Market analyst James Hyerczyk explains what he sees in the technical picture of gold as follows. The near future for gold looks cautiously optimistic. However, the potential for real interest rates to rise in response to the decline in inflation will likely affect gold investments. While speculative net-long positions increased, ETF holdings did not increase significantly. This indicates mixed sentiment for gold prices.
Gold is currently trading above both the 200-day and 50-day moving averages. This indicates a strong upward trend. Notably, the current price at $2,075.19 is significantly higher than both the 200-day moving average of $1,947.23 and the 50-day moving average of $1,949.64. This position above these key averages indicates a strong uptrend.
Additionally, the price being above the main support level of 2,009.00 strengthens the bullish outlook. However, the close proximity to the 2,067.00 minor support level suggests that this level could act as a pivot point. If the price holds above this minor support, it will likely continue its uptrend. However, a break below this point would lead to a retest of the main support at $2,009.00. Overall, market sentiment for gold prices reflects a bullish trend, supported by its position relative to key moving averages and support levels. However, a daily reversal or short-term correction is possible.
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