Gold spiked to new record high above $2100 in early Monday, in reaction to the comments from Fed Chair Powell on Friday, who said that current level of interest rates is sufficient to complete the task in putting inflation under control and pushing it towards 2% target.
Although the job was not done yet and Powell left the door open for further tightening, as uncertainty in the economic outlook is still elevated, prevailing tone was more dovish and pointing to a likely end of tightening cycle, with growing speculations about rate cuts.
Although the fresh rally which spiked to $2141, was not sustained, as metal’s price subsequently returned below $2100 marks, suggesting that traders may not be fully convinced yet, the upside prospects remain high.
The price holds strong positive momentum and overall picture regarding geopolitical uncertainty and Fed’s rate outlook remains supportive for further advance.
November’s monthly close above $2000 (the first one on record) was initial bullish signal, with rise well above former all-time high, adding to bullish outlook.
Close above former top ($2080) is seen as minimum requirement to keep fresh bulls intact, with deeper dips to hold above rising 10DMA ($2025) and guard lower pivot at $2000, loss of which will be bearish.
Regaining of new record high will open way for extension towards targets at $2177 (Fibo 123.6% projection of the upleg from $1614) and $2200 (psychological barrier).
Res: 2080; 2100; 2141; 2177.
Sup: 2057; 2025; 2009; 2000.
