GOLD PRICE FORECAST TALKING POINTS:
Gold costs have jumped to a fresh three-month-high to start this week. Well, Gold is trading above that level this morning.
Inflation data remains a significant theme across global markets and last week's US inflation print showed a strong beat. This week, the economic calendar has multiple inflation statements from outside of the USA.
Gold prices have invested over nine months in a retracement. After topping-out in August of this past year, what initially seemed like a pullback took on a different tone. Gold prices were in varying phases of pullback whilst adhering inside a bearish trend channel.
A lot has happened over the previous nine months. In other words into comparative extent, when Gold topped on August 7th, Bitcoin was trading under $12,000. Ethereum was below $400, also Dogecoin was a joke of a meme coin that few took seriously.
However, as inflation numbers have started to tick-up with the Fed still stating they're not too worried about high costs, buyers have started to re-appear in Gold and the yellow metal is presently trading in a fresh three-month-high while studying through a significant spot of resistance around the 1860 handle.
GOLD PRICES: THE BIG AND Smallish PICTURES CONVERGE
Taking a step back and the previous nine months of pullback becomes a bit less daunting. I have been following this during the move, but it was the month of March when things seemed to be shifting back into the direction of bulls.
In the middle of this month, I noted a critical support test happening in a confluent place on the chart. Gold prices had only begun to test a trend-line projection, which projection landed quite near the 38.2% retracement of this 2018-2020 major move.
A few months afterwards, a secondary support test at that same place opened the door for a double bottom formation in the early-days of Q2. A double bottom showing up was likely an item of excitement for bulls, since this is frequently regarded for bullish reversal possible. For the creation to fill-in, a break of the'neckline' is required, which happened a couple of months to April.
Gold prices were so courteous as to provide bulls another shot re-entry, pulling back to support in that neckline of resistance only a couple of weeks afterwards. And since that time, prices are flying-higher.
It's the longer-term chart that's most compelling here, at least in my view.
As soon as the Fed was reacting to Covid in February and March of last year, Gold was the place that began to really rally in the aftermath, leaping throughout summer to eventually set that all-time-high at August. However, along the way, Gold prices became very overbought from numerous vantage points and it was surprising, at least to me, it rallied as aggressively as it did for as long as it could.
The corresponding pullback/retracement has been likewise elongated, taking a full nine weeks prior to buyers were able to test over the bull flag creation. However if that is, in reality, the big picture bullish trend coming back in sequence, there might be ample room for bulls to operate.
On the under weekly graph, I'm taking a look at a couple areas of interest for another spot of resistance. The first is about the 1900 psychological degree , and the second is about the 14.4% Fibonacci retracement of the 2018-2020 big movement, revolved around the 1943 area. Beyond that, the 2k level stays key, and after that the all-time-high enters the equation, which is presently around 11% from current place Gold rates.