Gold has been on a remarkable uptrend since October 2022, when it hit a low of US$1,614 per ounce. Over the past two years, the precious metal has steadily risen, achieving higher lows and reaching an all-time high of US$2,790 on October 31, 2024. Currently trading around US$2,715, gold has experienced a year-to-date increase of approximately 3.5% and a robust gain of over 31% since the start of 2024.
Technical Indicators Point to Continued Growth
From a technical perspective, gold’s outlook remains highly positive. A significant event occurred on January 16, when gold broke out of a symmetrical triangle pattern—an indicator that typically suggests a continuation of the prevailing trend. In this case, the breakout suggests that gold’s uptrend, which began in 2022, is poised to continue.
Supporting this bullish outlook, gold prices are trading above the key 20, 50, and 100-day exponential moving averages (EMAs), which are vital technical indicators used to assess trend strength. These EMAs act as dynamic support and resistance levels, and gold’s position above all of them signals that buyers are in control. Moreover, the recent crossover of the 20-day EMA above the 50-day EMA is a strong bullish signal, reinforcing the market’s upward momentum.
Momentum Indicators Highlight Strong Upside Potential
Momentum indicators also contribute to the positive sentiment surrounding gold. The Relative Strength Index (RSI), which measures the speed and magnitude of price movements, currently stands at 62—above the neutral 50 level. This indicates a bullish bias, with market sentiment skewing towards further upside potential.
Gold’s price recently tested a key resistance level at US$2,724, which had been rejected twice in November and December 2024. Although the resistance holds for now, gold is expected to consolidate and establish support above the breakout level from the symmetrical triangle. If gold can close above US$2,724, it may pave the way for a retest of its all-time high at US$2,790.
The measured target from the symmetrical triangle breakout suggests a potential upside towards US$2,920, a level that could be the next major hurdle for bullish traders.
Conclusion
In conclusion, the technical setup for gold remains extremely bullish, with multiple indicators pointing towards continued upward momentum. Traders should closely monitor the US$2,724 resistance level. A successful breakout above this level could propel gold towards its all-time high of US$2,790 and potentially beyond, with US$2,920 as the next significant target. The current bullish trend appears firmly intact as we head into 2025.
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