Gold prices have surged to new record highs, reaching $2,845 on Tuesday, driven by strong demand and bullish momentum. The precious metal remains near its peak as trading approaches the day’s close, signaling the potential for further gains. A strong finish today could signal continued upward movement in Wednesday’s session.
Breaking Resistance, Eyes on Higher Targets
Tuesday’s price advance broke through a key resistance level that had previously halted Monday’s gains, opening the door to higher price targets. The next key resistance is seen at the $2,556 zone, marked by the 127.2% retracement of the recent large decline from the October peak of $2,790. However, there is also a potential resistance level around today’s high, where a prior support trendline was tested. While this trendline has not been broken yet, it remains a crucial factor in determining the market’s direction. A breakout above this line is possible, and even if it holds, gold could continue its ascent.
Bullish Momentum Remains Strong in Long-Term Trend
Gold is firmly entrenched in a long-term bull market, with recent developments suggesting sustained strength. The latest phase of this rally began in late February 2024 following a consolidation breakout. Since then, the 100-day moving average (MA) has provided dynamic support for the trend. The recent rise in January, following a period of consolidation, reinforces the bullish outlook, supporting continued demand during any pullbacks. However, as with any financial asset, gold’s upward trajectory is not without retracements, and periods of consolidation often follow advances.
Potential Support Levels in Case of Pullback
Last week, gold reached a new trend high above $2,790, which now serves as a potential support zone during any retracements. If the recent low of $2,807 is breached to the downside, a pullback could be underway. Additional support is seen at this week’s low of $2,772, as well as the 20-day moving average at $2,735, which could help cushion any further declines.
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