Gold Prices Forecast: Unstoppable Rise Enters New Territory – What’s Next?

Gold Prices Surge to Record Highs

The price of gold achieved a record high on Thursday, driven by a blend of factors including persistent inflation, high interest rates, and geopolitical tensions. Central banks are significantly increasing their gold holdings, contributing to this upsurge. The Federal Reserve’s anticipated interest rate cuts, as detailed in a recent J.P. Morgan report, are also playing a crucial role in gold’s price rally.

On Thursday, XAU/USD settled at $2233.12, up $38.26 or +1.74%.

Investor Sentiment and Market Analysis

Investors, seeking stability in these uncertain times, are turning to gold as a hedge against inflation and as a safe haven asset. This surge in demand has pushed gold prices to unprecedented levels. Experts, like Matt Willer of Phoenix Capital Group and Eric Croak of Croak Capital, highlight the combined effects of economic indicators and global tensions on gold’s appeal. With U.S. economic indicators showing softness, the demand for gold is on the rise, while other commodities face reduced demand.

Record Prices and Market Factors

Spot gold has seen a substantial increase, logging its best month since July 2020 with a 9% rise. U.S. gold futures also settled higher. The driving forces include anticipation of rate cuts by the Federal Reserve and robust safe-haven demand. Daniel Ghali of TD Securities notes the role of traders adjusting positions before holidays and increased trading activity at month-end and quarter-end.

Short-term Forecast and Long-term Potential

In the short term, experts like Eric Croak expect volatility, with prices potentially fluctuating between $2,140 and $2,200 per ounce. Stephen Akin of Akin Investments suggests that technical analysis points to a potential rise to $2,300 – $2,400 in the next one to two years. Despite potential short-term pullbacks, the overall outlook for gold remains bullish. Sean Casterline of Delta Private Wealth anticipates that any pullback would be limited, with previous resistance levels now forming support.

In conclusion, the combination of ongoing geopolitical tensions, economic indicators, and market sentiment suggests a bullish forecast for gold in both the short and long term. Investors and traders should closely monitor these factors for insights into gold’s future performance.

Technical Analysis

Gold (XAU/USD) hit an all-time high on Thursday, settling at a record close. There is no resistance at current levels, which means traders should watch for a closing price reversal top to signal the end of this surge.

On the downside, the key short-term support is $2146.155. A trade through this level will change the short-term trend to down. The nearest intermediate trend support is the 50-day moving average at $2081.18.