- The upward breakout trend in gold prices continues with only a slight and temporary pause.
- According to gold trading platforms, gold prices reached a record high, surging towards the resistance level of $2,432 per ounce.
Prior to this movement, and through the live trading recommendations page, we recommended selling gold from the resistance level of $2,420 per ounce. Subsequently, gold prices moved towards the $2,333 per ounce level amid profit-taking, before closing last week's trading around the $2,344 per ounce level. With the increase in global geopolitical tensions, especially from the Middle East region amid targeted Iranian strikes towards Israel, gold prices may find a new opportunity to rebound upwards.
According to recent trades, the price of gold has reached multiple all-time highs in less than a week — but why? And where does it go from here?
This is just the beginning of a series of gold victories, according to experts. In this regard, John Hathaway, Senior Portfolio Manager at Sprott Asset Management, said in a Sprott Insights report that the price of gold "is likely to rise by another 25% in 2024." Assuming that the spot price of gold is $2,385 (which is where the XAU/USD pair was hovering at the time of publishing this article), this means that the price of gold will reach its highest level at $2,982.50 per ounce at some point in the coming months.
Meanwhile, gold price forecasts contain more escalatory and specific expectations: according to the latest long-term forecasts, the price of gold will reach $2700 by mid-2024, then $3000 by mid-2026. The price of gold will rise to $3500 during 2028, and $4000 in 2029, and $5000 in 2033. This was more than the highest two prices for gold ever this week... combined. Clearly, this means that the price of gold will be more than double at that time.
But why is the price of gold rising so much?
Periods of high inflation are usually associated with a rise in the price of gold. So do significant amounts of geopolitical tensions on the world stage. According to analysts, large market players became particularly interested in buying gold at the beginning of March 2024 against the backdrop of the release of American macroeconomic data. Also, American indicators reached new record levels, such as gold prices. The correction will happen sooner or later, so investors hedge their positions through gold to secure their money. It should be noted that increasing tensions in Eastern Europe and the Middle East have prompted market participants to develop more conservative approaches. Another driver for increasing demand for gold is the active purchase of gold by global central banks, amid concerns linked to the precedent of confiscation and freezing of Russian gold and foreign exchange reserves.
Moreover, another element that could push the price of gold higher later in the year is the fact that gold, historically, tends to outperform during periods of interest rate cuts, according to analysts.
Gold Price Forecast and Analysis Today:
Gold price has now retreated to trade at the 100-hour moving average line. Last Friday's late pullback pushed the price of gold into the normal trading zone of the 14-hour RSI. In the near term, and according to the performance on the hourly chart, it appears that the gold price has recently completed a downward breach from the formation of an ascending channel. The 14-hour RSI also appears to be supporting the downside after recovering from overbought levels. Therefore, the bears will target extended pullbacks at around $2339 or lower at the $2319 support. On the other hand, the bulls will be looking to pounce on the bounce at around $2,375 or higher at the $2,395 resistance.
In the long term, and according to the performance on the daily chart, the price of gold continues to trade within an ascending channel. Also, the 14-day RSI appears to support a long-term bullish bias after rising to overbought levels. Therefore, the bulls will look to extend the current winning streak towards $2430 or higher to the $2503 resistance per ounce. On the other hand, the bears will target long-term profits at around $2,277 or lower at the $2,199 support.
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