Gold 9-month rally ends on stronger dollar, analysts see longer-term gains
UBS and Goldman Sachs bullish on Gold outlook
Gold’s nine-month winning streak appears to have ended this November, since prices retreated sharply from their all-time highs.
This downturn coincided with Donald Trump’s election victory, which bolstered the U.S. economy’s outlook, spurred yield gains, and strengthened the dollar, undermining gold’s appeal. Yet, technical indicators and strategic central bank purchases suggest that gold price long-term trajectory remains optimistic, with forecasts pointing toward new highs by 2025 and beyond.
The yellow metal, which had rallied nearly 40% since February 2024, witnessed a turbulent November. After slipping earlier in the month, gold saw a four-day recovery, with prices surging during the Asian session on November 29 to touch $2,665. The emergence of a golden cross on the 50 and 100-day EMAs at $2,644 hints at a potential bullish continuation. Analysts now view $2,644 as a crucial short-term support level, with a breach below potentially leading to a renewed downtrend.
Gold price dynamics (September-November 2024). Source: TradingView
UBS and Goldman Sachs bullish on Gold outlook
Strategic moves by global central banks also highlight gold’s enduring appeal. Poland emerged as the largest gold buyer in the second quarter, boosting its holdings to 420 tons, half the stockpile of India or Japan. The country’s central bank governor, Adam Glapinski, aims to raise gold’s share to 20% of national reserves and the Czech Republic also followed a similar path, gradually expanding its gold reserves to mitigate price volatility.
Looking ahead, major financial institutions remain bullish. UBS forecasts a consolidation period for gold in the short term but expects prices to climb to $2,900 by the end of 2025 and $2,950 by the end of 2026. Goldman Sachs shares this optimism, listing gold among its top trades for 2025 and projecting a potential surge to $3,000 per ounce under Trump’s presidency.While November’s reversal raised questions about gold’s immediate direction, technical support levels and continued central bank demand suggest that the metal remains a crucial asset in an environment of economic uncertainty and geopolitical shifts.
Gold price struggles below $2,640 resistance after historic drop. Macro funds have liquidated nearly 60% of their extreme positions post-election, mitigating immediate downside risks.
