Gold Price Forecast: Gold's 9-Month Streak at Risk into Month-End
Gold Talking Points:
- Gold was consistently strong from lows in February into late-October, but a different trend appeared just ahead of the November open.
- Gold prices pulled back quickly after results of the U.S. Presidential election and likely a reason was anti-fiat flows driving into Bitcoin.
- Last week saw a massive rally as spot gold gained by 5.98%, the most since March of 2023 which was around the time that regional banking worries were coming into the picture, propelling gold up for it’s third test of the 2k psychological level.
- In my last gold article titled ‘Gold Goes for Recovery – Levels to Know,’ I looked at a big spot of support and that’s currently marking the two-month-lows in spot gold prices.
Last week was a big week for gold. With spot gold prices gaining 5.98%, it was a clear and decisive response from bulls after the pullback that had taken over around the November open. But – there was some geo-pol drive behind that bid as escalating tensions in Ukraine brought buyers back into the mix, and as looked at in these articles just as the move was getting started, support had showed at a key spot on the chart.
The 2538 level is the 50% retracement of the June-October move and, so far, that’s held the two-month-low in spot gold prices. Gold gained each day last week before opening this week with an aggressive pullback.
Gold Daily Chart
Chart prepared by James Stanley; data derived from Tradingview
Gold Shorter-Term
While bulls were in control of gold prices for much of last week, this week opened in a far different manner. The initial move after the weekly open tested above 2720 but sellers hit that quickly, driving down to a zone of prior support at 2660-2666 (which remains relevant). After another bounce from that zone, sellers stood ready to hit a lower-high with resistance at prior support, taken from the 2685 level. And then as US markets opened for the day on Monday sellers made a big push, driving all the way down to just above the 2600 level which is where the sell-off finally started to slow, a bit.
The rest of Monday and into early-Tuesday trade it was all about the 2617-2621 zone which, ultimately, helped to cauterize support before bulls took another shot at regaining control of the situation.
Gold Two-Hour Chart
Gold Four-Hour
The four-hour chart appears a bit clearer to me but it also highlights the importance of buyers regaining control and taking out the 2660-2666 zone. And given the recent grind with support at 2617-2621, there’s a spot of short-term resistance that could be used for higher-low support, plotted around 2632.
The current four-hour bar in spot gold has a few hours until completion and, ideally for bulls, the four-hour candle close would show above 2643 which marks the bottom of a zone that runs up to 2650.
Gold Four-Hour Chart
Gold’s Bigger Picture
I mentioned the February instance a little earlier and that remains key in the bigger picture, as gold has gained for each monthly bar since January. That makes for nine consecutive months of gain which would be more than any other period in the last 24-plus years for spot gold prices.
Unless something aggressive happens in the next couple of days, with the Thanksgiving holiday in the U.S. leading into the final trading day of the month, it looks as though that streak may be broken.
But – the underside wick on the monthly chart is already fairly wide – and if buyers do put in more of a dent here, that would be a clear support response after a pullback attempt, and that’s something that could keep a bullish bias for gold prices as we move towards the end of what’s been a big year for the metal.
Gold Monthly Price Chart
--- written by James Stanley, Senior Strategist
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024