Gold’s Resilience Above $1,900 Tested by Lower Milestones and Weekly Losses
Gold’s steadfast perch above the $1,900 mark is encountering doubts as monthly milestones in the precious metal’s price point to an evolving landscape, marked by a fourth consecutive weekly loss.
On New York’s Comex, the most-active December contract for gold futures concluded its trading session at $1,918.40 per ounce, officially settling Friday’s trade at $1,916.50—an incremental rise of $1.30 or 0.01%. However, the week overall witnessed a decline of just over $30, equating to a 1.5% loss for December gold.
Spot gold, which mirrors real-time physical bullion transactions and garners closer attention from certain traders than futures, wrapped up at $1,889.42 per ounce, registering a marginal 5-cent gain on the day.
As the spot bullion price hovers within the $1,800 range, the endurance of gold futures at the $1,900 level remains uncertain, analysts observe. In this week’s unfolding narrative, the prevailing rally of the dollar has exerted significant pressure on the price of gold.
Gold’s Price Prospects
The outlook for gold remains subdued under the persistent shadow of bearish forces, particularly as the Dollar Index scales up to 103.58. This climb in the currency indicator prompts concerns that it could potentially ascend further to 104.60, according to SKCharting’s Dixit.
Dixit’s cautionary note underscores the potential for spot gold to trend downward towards $1,850 should the Dollar Index maintain its current trajectory. To reignite gold’s upward momentum, the Dollar Index must breach the levels of 103 and 102.60, followed by 101.60.
Technical Indicators and Analysis
Dixit further elaborates on the technical indicators that are shaping gold’s near-term prospects. The stability of spot gold below the 5-day Exponential Moving Average (EMA) of $1,896 suggests a looming likelihood of a drop below $1,885, potentially paving the way for further decline to the range of $1,878-$1,868. Should weakness persist, the metal could test significant downside support at the monthly Middle Bollinger Band of $1,850 and the 100-week Simple Moving Average (SMA) of $1,846.
On the flip side, Dixit highlights the prerequisites for a rebound in gold’s trajectory. A recovery beyond the 5-Day EMA of $1,896 needs to be followed by a successful clearance of the 200-day SMA at $1,907.
In a scenario where spot gold manages to navigate its way to the $1,929-$1,935-$1,940 resistance zone, it could potentially generate a short-term bullish wave. Notably, a more formidable barrier lies at the weekly Middle Bollinger Band of $1,959, closely trailed by the 100-day SMA at $1,962.
As market participants monitor these technical thresholds and the interplay between gold and the Dollar Index, the precious metal’s trajectory is poised to hinge on these critical junctures in the weeks to come.
