Gold prices experienced a modest decline for the second consecutive day, maintaining their position near the significant $2,000 per ounce threshold on Tuesday. This resilience was attributed to Europe’s economic challenges, which bolstered the appeal of gold as a safe-haven asset, even as reduced intensity in the Israel-Hamas conflict lessened the need for hedging.
The most-active gold futures contract on the New York Comex for December settled down by $1.70, or 0.08%, closing at $1,986.10 per ounce. In the previous session, December gold had seen a 0.3% dip, following a four-day rally that had added approximately $30, or 3%, to the benchmark gold futures contract.
Commenting on this, Crraog remarked, “Traders may once again be wondering whether a run toward $2,000 is on the cards.”
The spot price of gold, which some traders closely monitor, was at $1,973.49 at 15:10 ET (19:10 GMT), showing a modest increase of 63 cents, or 0.03%, following a session low of $1,953.81.
Traders noted that gold’s decline might have been more significant if not for Europe’s economic challenges. On Tuesday, data from Germany indicated that a recession was in progress, while in Britain, businesses reported another monthly decline in activity, underscoring recession risks ahead of the Bank of England’s upcoming interest rate decision.
On the Middle East front, diplomatic efforts succeeded in persuading Israel to postpone a ground assault on Gaza, while the United States and other world powers engaged in negotiations to secure the release of approximately 200 Israeli hostages held by Hamas, the Palestinian militant group.
The performance of gold has left both bears and bulls astounded, as the precious metal continues to embrace its role as a safe-haven asset during the conflict, outperforming the US dollar. Comex futures have surged from mid-$1,800 an ounce to $1,900, $1,950, and ultimately breached the $2,000 mark last Friday.
Many experts agree that the possibility of another breach of the $2,000 mark is not out of the question, with technical charts indicating a potential rise to at least $2,010 and possibly reaching $2,080 at the upper end.
While the resilience of gold prices has been notable, it has also raised concerns regarding a potential “triple top” formation, which, in market terms, typically signifies a shift from a bullish trend to a bearish one. However, some commodity technicians who have extensively analyzed gold charts suggest that this time may prove to be an exception to the rule.
Sunil Kumar Dixit, Chief Technical Strategist at SKCharting.com, and a frequent collaborator with Investing.com, commented, “While triple tops are usually considered a potentially bearish formation, this time the scenario indicates an exception to the thumb rule. The current price action seems to be waiting for a break above the horizontal resistance zone of $1,998 to prompt a rather quick run into the benchmark $2,070-$2,080 range.”
