Gold prices saw a historic one-day jump on Monday, rising more than 2% to break the $3300 threshold. The metal has continued to rocket higher after blasting through a major resistance level at $3315. This level neatly coincides with the 10-day moving average, and it corresponds with the 38.2% Fibonacci retracement from the bear-leg swing of $3500 down to $3201. Analysts say this emerging trend could mark a turning of the tide and a budding path toward more sustainable increases.
After weeks of declines, gold prices have returned to life, suggesting a recovery could be underway. This is after multiple failed daily attempts to close below this key support level at $3228. This is a 50% retracement of the entire rise from $2956 to $3500. At the same time, it is in line with the daily Kijun-sen indicator. The consistent failure to surpass this support has amplified market interest in gold as a safe-haven asset, particularly amid ongoing uncertainties surrounding the US-China trade conflict.
Major resistance continues to loom overhead for Gold at $3351 and $3386. These moves align with the 50% & 61.8% Fibonacci extension retracement levels. A new daily close above $3315 would pretty clearly confirm gold’s upward breakout signal. This action would unlock new momentum for a sustained recovery further out to these ambitious goals.
Gold’s recent price movements are supported by a significant change in market sentiment. The 14-momentum indicator just recently went positive crossing the centerline. All of the daily moving averages are close to a full bullish configuration. This trend potentially sets the stage for sustained upward movement in gold prices.
Gold’s recent rally has been driven by a trifecta of factors. A weaker U.S. dollar yielded greater demand for dollar-denominated gold, and a continuation of geopolitical turmoil created a cocktail of heightening uncertainty. As haven investors pour into gold and other safe-haven assets, market dynamics only become more complex.
If you’re a gold trader, watch to see how the support levels hold. Key levels of interest to look for bumps at are $3300, $3272, $3228 and the bottom support at $3201. These support zones will be crucial in determining whether the recent price action is a sustainable trend or a temporary bounce.