- Gold maintains position near $2720 resistance, having recently surpassed its 50-day moving average.
- Silver continues its upward trend, with eyes set on $33.10 as bullish momentum strengthens.
- Bitcoin trades around $100,000, demonstrating stability within its ongoing uptrend.
Market Insights
The efforts to control US inflation have seemingly reached a standstill, while risks in the labor market have diminished. Nonetheless, the Federal Reserve has indicated that another 25 basis point rate cut may be on the horizon for December. This signals a peculiar detachment from incoming economic data. Meanwhile, nations such as China and those in Europe are ramping up monetary stimulus to mitigate potential downturns anticipated in the coming year.
Given the synchronized policy adjustments across the three major economies, alongside the prospect of additional fiscal stimulus, the environment of persistent inflation coupled with an increasing money supply is favorable for those seeking assets to protect against currency devaluation. Consequently, it is not surprising that there has been a noticeable uptick in gold, silver, and bitcoin over the past week.
Gold's Recovery Following Lengthy Consolidation
Source: TradingView
Gold has seen a notable surge since Monday after a period of stabilization over the two preceding weeks, fueled by China's latest stimulus measures. An emerging morning star pattern on the daily chart solidifies this upward trend. The precious metal has reclaimed its position above the critical 50-day moving average and is now testing the significant horizontal resistance at $2720, a level that has seen significant action on either side earlier this year.
The forthcoming price action is pivotal. A breakout and daily close above $2720 could invite further long positions, allowing traders to set a tight stop-loss beneath this level, potentially targeting new record highs around $2790. While this outlook is promising, key momentum indicators like the RSI and MACD have also shown bullish tendencies, fostering a favorable near-term sentiment from both technical and fundamental viewpoints.
Conversely, if gold fails to surpass the $2720 resistance, it could alter the bullish setup. In this case, short positions might be initiated below the resistance with stops placed above. Targets to consider would be $2676.50, aligning with the 50-day moving average, or $2625, a point of interest that has previously shaken out buyers near the month’s end.
Silver's Ascent Continues
Source: TradingView
Silver's recent stagnation has resolved favorably, breaking above critical downtrend resistance and encountering selling pressure at $32.18. This marks an essential level for traders to watch, with subsequent targets set at $33.10 and $34.87.
With bullish signals emerging from the RSI and MACD, along with the price remaining in a sustained uptrend initiated on November 28, there is a near-term inclination to favor buying on dips and breakouts. Key support levels to observe for long positions include the 50-day moving average and previous downtrend resistance hovering around $31.50. A breach of these levels would challenge the bullish sentiment.
Bitcoin's Bullish Consolidation
Source: TradingView
Following an initial breakout above $100,000 earlier this month, Bitcoin futures have stabilized in recent days while continuing to ascend along the uptrend established in early November. This trend offers a positive outlook for those hoping for another strong rally.
Despite diverging indicators showing a potential waning of bullish momentum, it's important to note that the RSI has recently broken its downtrend, signaling a possible shift. However, the MACD remains in a downward trajectory, yet to fully confirm this bullish potential.
In light of the mixed momentum indications, the tactical approach remains to buy on dips as long as the price stays above essential uptrend support, currently at approximately $96,550. A pullback towards this support can present a strategic entry point for long positions, securing a tight stop below while targeting a return to record highs around $103,636.
Should the price ascend beyond the existing record, the strategy may shift to buying with protective stops in place, while retaining a flexible stance to reevaluate entry based on clear topping patterns.
In the event of a breakdown below the uptrend, the bullish bias would be reversed, potentially leading to bearish setup opportunities.
