Gold prices are experiencing a modest increase in midday U.S. trading on Monday, with December Comex gold futures reaching a record high of $2,549.90. Spot gold prices also hit an all-time high of $2,521.00 overnight. The surge in gold prices is driven by bullish charts and heightened safe-haven demand, with further gains expected. December gold was last up $7.50, trading at $2,545.40, while September silver rose $0.531 to $29.37.
According to broker SP Angel, gold prices began to climb on Friday afternoon following reports that China’s central bank has issued new gold-import quotas to local banks, sparking speculation about increased buying. Chinese 10-year bond yields fell to record lows last week as institutions sought alternative safe-haven assets due to concerns over economic slowdown and deflation. This shift has made gold a prominent choice for Chinese investors.
Gold is also receiving support from ongoing concerns about a potential Iranian military strike against Israel. However, reports suggest that a ceasefire agreement between Israel and Hamas may be imminent, which could alter Iran’s stance on a potential attack following recent Israeli actions against Hamas and Hezbollah officials.
U.S. stock indexes are up at midday, with market anxiety about a U.S. economic recession easing significantly after a strong retail sales report for July. Goldman Sachs has reduced its recession probability to just 20%.
Traders are eagerly anticipating the annual Jackson Hole Federal Reserve symposium starting later this week. Historically, significant market-moving statements have been made at this event. Fed Chairman Jerome Powell is scheduled to speak on Thursday morning.
In the key outside markets, the U.S. dollar index is notably lower, while Nymex crude oil prices have dropped to around $74.75 per barrel. The benchmark 10-year U.S. Treasury note is currently yielding approximately 3.85%.
Technically, December gold bulls are in a strong near-term position, with the next upside target set at a close above $2,600.00. Bears’ next downside target is pushing prices below $2,450.00. Resistance levels are seen at the overnight high of $2,549.90 and then $2,575.00, while support is at today’s low of $2,523.70 and $2,500.00. Wyckoff’s Market Rating stands at 8.5.
For September silver futures, bulls and bears are on an equal footing in the near term, but momentum currently favors the bulls. The next bullish target is a close above solid resistance at $30.00, while the bearish target is closing below $27.50. Resistance levels are at $30.00 and then $30.50, with support at the overnight low of $28.78 and $28.50. Wyckoff’s Market Rating is 5.0.
