What's next for gold
Financial markets have experienced several waves of explosive growth in assets in recent months ranging from meme stocks and industrial metals to agriculture and energy. What if now it's Gold's turn? Especially given the growing fears of inflation on the back of expensive equities. In addition, the end of a long period of sluggish movement in Gold is now in sight.
With a strong bull-run over the previous six trading sessions, it has risen almost $100 or 5.2% to $1860. It broke the downward correction that has been in place since August last year. We have seen several critical bullish signals in Gold since early November. Breaking above the 50- and 200-day moving averages on impressive volumes with high amplitude was an important sign of bullish strength.
Early this week, the bears surrendered another stronghold as the price managed to break above the resistance line of the downtrend through the highs of August 2020 and June 2021. The downtrend break also coincided with a rise above the $1830 area, the former turning point since July. Platinum is also gaining strength, and Silver has broken its sideways trend, displaying the breadth of the rally.
In November, Gold discovered a solid ability to withstand the downside. It manages to gain on the back of a rising dollar despite occasional spikes in government bond yields - the main factors pushing investors away from the precious metal.
Repeatedly this year, we have seen Gold bought back on dips below $1720, where the 61.8% Fibonacci retracement level of the 2018-2020 mega-rally passes. The development of this pattern suggests the potential for the price to reach new historical highs and reach the round level of 2600 by the end of next summer.
This article was submitted by Alex Kuptsikevich, Senior Market Analyst at FxPro.
