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Gold short- and medium-term technical vision analysis: the 2125-2150 area may be tested

2023-12-26

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Data released by the U.S. Department of Commerce last Friday (December 22) showed that the Fed’s preferred inflation target, excluding food and energy, the core PCE price index growth rate in November fell back to 3.2% year-on-year, from the previous value of 3.5%, which was lower than the market The expected 3.3%; the month-on-month growth was 0.1%, which was also lower than the expected 0.2% and was consistent with the previous revised value.

The U.S. dollar index hit an almost five-month low on Friday as the Fed's favorite inflation data was weaker than expected, solidifying market expectations for a rate cut by the Fed in March next year. Spot gold prices briefly rose above $2,070 per ounce for many weeks. new highs. Spot gold closed at $2,052.96 per ounce last Friday, an increase of 0.34%.

Sengezer pointed out that gold prices hit an all-time high in 2023 and are up more than 10% so far this year. Federal Reserve policy and global economic conditions are the main factors that may drive stronger gold prices. The technical vision suggests that gold’s bullish potential remains intact heading into 2024.

From a technical perspective, Sengezer said the weekly chart confirms that gold prices are showing a bullish bias as the gold market approaches trading in 2024. The relative strength index (RSI) remains above 50. Additionally, gold remains in the upper half of its long-term upward return channel.

Sengezer said that on the upside, short-term resistance for gold prices lies at $2,060 per ounce. Once this level is breached and confirmed as support, gold could test the $2,125-$2,150/oz area (all-time highs, upper limit of the return channel).

In this scenario, buyers may seek to take profits and make it difficult for gold to continue its uptrend before a technical correction. However, if gold prices can stabilize above $2,125-$2,150/oz, then $2,200/oz and $2,440/oz may be set as the next bullish targets.

However, given the slope of the ascending channel, it may take more than a few months for gold to reach its ultimate target.

On the downside, Sengezer noted that the 20-week simple moving average (SMA), 50-week moving average and the midpoint of the ascending regression channel appear to be forming strong support at $1960-1950 an ounce.

If the above support level fails, then gold prices may continue to fall towards $1,880/ounce (100-week moving average) and $1,850/ounce (200-week moving average).

A weekly close below $1,850/oz could bring in more sellers and open the door for another leg down and towards $1,800/oz (the lower edge of the ascending return channel).

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Gold short- and medium-term technical vision analysis: the 2125-2150 area may be tested

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