Gold Market Update:
- Recent trading dynamics show gold moving beyond a previously established range. This shift follows the sell-off associated with the elections, resulting in one of the strongest weekly performances for gold since the regional banking turmoil in early 2023.
- Support levels were last tested at 2617-2621, and since then, bullish momentum has ignited, with the 2700 level in focus today. The next significant resistance zone above is from 2717-2721, corresponding with Fibonacci retracement levels that align with previous price highs observed after the election bounce.
This week has been notably robust for gold prices, contrasting sharply with the preceding week where prices remained confined within a steady range, showing support at 2617-2621 and resistance at 2643-2650, and further at 2660-2666.
During last week’s webinar, I highlighted the established range while gold was fluctuating between 2643-2650. A subsequent support test occurred shortly after at the 2617-2621 level. The weekly bar closed still within this range; however, momentum turned bullish at the start of this week, igniting a rally on Monday to the next resistance point at 2675. Following a brief pullback, support emerged at previous resistance levels of 2660-2666, maintaining a higher low that facilitated another breakout.
In yesterday's webinar analysis, gold was approaching the 2700 level, showcasing strong bullish control. Prior resistance levels of 2675 and 2685 were identified as potential support. The initial approach to 2700 resulted in a minor pullback, but buyers managed to maintain prices above 2675, positioning the market for a second attempt at this key level.
The pivotal area for bulls now lies around 2717-2721. The 2717 mark aligns with a significant 14.4% retracement of the previous major move that established lows last month at the 50% level, while 2721 represents a swing high from that period. Collectively, these levels create a resistance zone approximately $100 above last week’s support of 2617-2621.
Gold Four-Hour Price Chart
Gold: Analyzing the Broader Landscape
The performance of gold has been robust throughout 2024, although recent election-driven pullbacks raised some concerns. However, the current week's strength is promising for gold bulls and indicates a potential reclaiming of control, backed by the support observed in the last two weekly candles.
This scenario also introduces an essential test at the Fibonacci level of 2717—an important price point that buyers aim to close above on a weekly basis. A closure above this level, rather than a mere upper wick indicating resistance, is crucial to avoid further consolidation.
If gold surpasses 2717, it may target the 2750 level, where buyers faced challenges in October, while the 2800 mark remains untested in spot trading, previously ending just shy of that significant figure.
Gold Weekly Chart
--- authored by James Stanley, Senior Market Analyst
