Gold’s rally continued today with enthusiasm, rising to a high of 2,075, just shy of the record 2,082 high reached in May. It is a wide range day and gold is set to close strong, in the top quarter of the day’s range. This follows yesterday’s bullish November close. It was the highest monthly close ever for gold as it prepares to reclaim the 2,082 high and continue higher. If a breakout above 2,082 high is sustained it will trigger a breakout of a 12-year base for gold. That is a very long base that has some bulls anticipating an historical rally in gold.
Can Upward Momentum Be Sustained?
Nevertheless, as of today’s high, gold was up 14.6% from the October swing low at 1,810. That’s a healthy advance in 40 trading days. In other words, momentum started at the October low and has stayed relatively strong till today. Will there be strong enough demand to push gold above 2,082 and then keep going? It is possible, but certainly the chance for a correction grows stronger the higher gold gets.
Might Current Rally Match the First?
The first leg up in the uptrend, starting from the November 2022 low saw the price of gold rise by 21.2% in 64 days. If we see a similar advance in the current rally, gold would be hitting 2,194. Lower down, and the first identified new high target looks to be around 2,131. That is where that CD leg of the current rally matches the advance during the first leg up from A to B. Many times, resistance is seen at the completion of an ABCD pattern, or a new bullish signal is generated as the pivot is exceeded and prices keep rising.
Higher Prices in Sight
Since gold is on track to close strong the potential for a bullish continuation into Monday is a likely possibility. As noted yesterday, on the way up from the October bottom, gold has not paused for more than two days before continuing higher, other than the 38.2% Fibonacci retracement that ended on November 13 (C). Until that changes, we can expect gold to continue to rise. Certainly, this weekend the financial press will be writing about it and will help to stoke demand. This will lead to the realization that gold is about to break out to record highs, and it has a good chance of continuing to rise.
Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.