December 03, 2023 (MLN): International spot gold closed at an all-time high of $2,071, surpassing the previous ATH closing of August 2020.
This brings it closer to the $2,300 target, which becomes more likely as gold enters price discovery mode.
This means that there is no historical resistance to limit its upward movement, and it can potentially soar to unprecedented levels, with Fibonacci-based targets of $2,300.
XAU/USD Weekly time-frame chart:
| Support Levels | ||
|---|---|---|
| $2,055 | $2,010 | $1,974 |
| S1 | S2 | S3 |
| Resistance Levels | ||
|---|---|---|
| $2,070 | $2,102 | $2,250 |
| R1 | R2 | R3 |
History suggests that assets in price discovery mode often experience massive expansions.
Furthermore, gold has faced and failed to break the ~$2,070 level three times since 2020.
Breaking through this resistance after numerous years and attempts is likely to trigger a substantial rally.
Gold has also benefitted from the declining US Dollar and bond yields, which have remained under pressure since the past few weeks.
The US Dollar Index (DXY), which tracks the value of the dollar against six other top currencies fell for the third straight week, benefitting gold as it makes it cheaper for buyers in other currencies.
Moreover, the key benchmark 10-year US government bond yields dropped to 4.197%, down from 4.472% the previous week and 5.021% since the yearly high on October 23.
A lower bond yield means a lower opportunity cost for holding zero-yielding gold.
Disclaimer: The views and analysis in this article are the opinions of the author and are for informational purposes only. It is not intended to be financial or investment advice and should not be the basis for making financial decisions.
Copyright Mettis Link News
Posted on:2023-12-03T16:52:58+05:00
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