Gold tests key resistance after hitting new highs
Gold tests key resistance after hitting new highs
Gold has consistently made new all-time highs in 2024, reflecting a strong bullish trend throughout the year. After peaking at $2480 in July, gold experienced some bearish pullbacks, leading to a period of consolidation marked by an ascending triangle on the chart.
This pattern, characterized by triple tops and higher lows, suggests a potential breakout above previous highs. Ascending triangles are generally seen as bullish formations, especially when they coincide with a long-term uptrend, reinforcing the expectation of further gains in gold.
Last Friday, gold prices confirmed this expectation with a significant 2.5% jump, rising from the $2450 support level and breaking through the $2480 critical resistance level. This marked the strongest one-day rise since April, driven by a sharp fall in the US dollar. The dollar fell to an eight-month low after disappointing economic data and growing expectations of a Federal Reserve rate cut.
The weakening dollar provided strong support for gold, taking it to new heights, Traders Union reported. As the market looks ahead, today's trading session could witness gold retesting the recently broken $2480 resistance zone. If this level holds, the bullish momentum could continue, setting the stage for further gains.
Gold price forecast for today from Traders Union analyst Sholanke Dele.
With no major economic news expected today, volatility in gold prices may be limited. However, ongoing political tensions in the U.S. combined with weak economic data and the possibility of a Fed rate cut continue to create a favorable environment for gold in both the short and long term.
Traders should keep an eye on how gold reacts to the $2480 level as this is likely to be a key factor in determining its next move.
Read also: EUR/USD targets key resistance amid bullish momentum
