Gold prices reached a new record high today, surpassing 2,110, before experiencing a slight pullback. This surge represents an extension of the recent two-month rally, initially sparked by the Israel-Hamas conflict,which heightened global geopolitical tensions and triggered a flight to safety among investors, bolstering demand for Gold.
The upsurge in gold’s value is further fueled by growing expectations of monetary easing by key global central banks. Fed, along some other major global central banks like ECB are anticipated to implement interest rate cuts in the coming year. This speculation is a critical factor in the current Gold price dynamics, as lower interest rates typically decrease the opportunity cost of holding non-yielding assets like Gold, making it more attractive to investors.
Technically, initial resistance is seen at 100% projection of 1810.26 to 2009.26 from 1931.39 at 2130.39. Some consolidations might be seen first, and volatility could be high due to near term profit taking around prior record high of 2074.
Nevertheless, outlook will stay bullish as long as 2009.26 resistance turned support holds, and further rally is expected. Sustained break above 2130.39 will pave the way to 161.8% projection at 2253.37.
However, the broader picture for Gold’s long-term trend revolves around whether it can maintain enough buying momentum to reach 100% projection of 1160.17 to 2704.84 from 1614.60 at 2529.27, surpassing 2500 mark. The potential to achieve this ambitious target hinges on whether there will be a global loosening of monetary policy next year and if geopolitical tensions persist or escalate further.
