Gold Trading | Prices sparked over 5%, still cruising strong

Gold prices witnessed nearly one and half percent weekly gain last week, while since the start of the month gained over five percent.  Prices break their six month high as geopolitical tensions between Israel and Hamas typically contribute to a higher demand for gold as a traditional safe-haven asset, the current risk-on sentiment is posing a challenge to the price of gold.

The US dollar weakens  nearly half percent against its major counterparts.  The currency found support at the start of the week following the robust US economic data released during the previous week. The recent job data paints a picture of a robust economy.

Weekly Initial Jobless Claims have reached their lowest level since January, indicating a solid and resilient job market. However, a contrasting trend is seen in existing home sales, which have fallen to their lowest point since 2010, signaling challenges in the housing market.

This week, Federal Reserve Chairman Jerome Powell’s speech is due on Wednesday, which will have a strong impact on the Yellow metals. In the previous week, he had made it clear that the central bank was not planning an immediate rate hike. Powell emphasized the potential for further tightening of monetary policy in response to additional signs of growth.

Gold Trading | Technical Outlook

Gold prices witnessed a meaningful recovery. Since  9 October 2023 turned positive from the low 56421  prices recovered more than 6%. Recently it touched a six month high 61124.00.

Today, prices traded up by 0.66% at 60716 as compared to previous day’s close of 60318.00.

On the above chart, prices are still trading above falling channel line resistance. Also, prices make a higher high bullish candlestick. Both technical aspects are indicating a bullish momentum in the near future.

However, after an abrupt bullish rally in the last two week, prices may take some breath before the next upside move. On the upside, a break above 60855 will open the door for next resistance 61000-61250.00. Else, any dip towards 60200-60050 may attract buying activities in near future.

On the downside, crucial support is seen at 59855 and a break below it prices may retreat towards 59420-58980.00