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Gold Price Forecast: Now All-time Highs are in Focus

gold price analysis

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The gold price is looking firm in mid-week trade at $1798 an ounce following the achievement of fresh multi-year highs over the course of the past 24 hours. Analyst and technical forecaster Richard Perry of Hantec Markets considers the next potential targets for bulls to aim at.

A closing break above $1789 once more pushes gold to multi-year highs.

The move has also seen gold breaching the 2012 key high of $1795 (if a high that long ago can be considered as resistance).

Aside from a high of $1803 from November 2011, the next long term level of any note is now the all-time high of $1920 from September 2011.

With this now being three decisively strong candles in the past four sessions (the fourth session was a non-event from the US public holiday last Friday), it is a move higher that is backed by bullish momentum.

Gold price charts

The RSI in the high 60s is now the strongest it has been since February, whilst Stochastics remain bullishly configured above 80 and MACD lines rise decisively.

There is an element of consolidation of the breakout this morning, and a feature of previous breakouts has been a subsequent consolidation and near term pullback.

This would be an opportunity of seen once more. Support of the four week uptrend comes in at $1775 today and is a good basis for any intraday slips now.

The importance of the breakout support around $1764 is also growing, with a band between $1757/$1764. We continue to back this gold breakout to multi year highs.

We can derive a conservative breakout target of $1820 from the April the June range breakout.

 

Gold Supported in Current Market Environment

There is a cautious look to major markets this morning. Wall Street markets fell away late into yesterday’s close and this is leaving a bitter taste in the mouths of equities traders early today. A risk negative bias is threatening through US bond markets as a “bull flattening” is emerging.

With longer dated yields (associated with growth and inflation expectations) are falling more than shorter dated yields (which are fairly anchored now on expectations of Fed tinkering with yield curve control).

This could begin to weigh on equities if it continues. Forex markets have been choppy in recent days, with false moves seen on major pairs and increasingly ranging configuration. The UK has a bit of focus into today. Sterling has been boosted in the past 24 hours from a more constructive dialogue over the Brexit trade deal talks.

UK Chancellor Sunak is also set to announce further fiscal support today. Whether this is all enough to make a sustainable difference to sterling, with forex pairs seemingly stuck ranging, remains to be seen. One other key mover is a breakout on gold to multi-year highs, as it closes in on $1800 for the first time since 2011.

Daily drip feed of risk negative newsflow on rising COVID-19 reinfection rates, economy re-openings paused and snipping between the US and China over Hong Kong, all play into a stronger outlook for gold.

Wall Street fell into the close last night to leave the S&P 500 ending the session -1.1% at 3145. US futures are all but flat today with the E-mini S&Ps -0.1%. This has left Asian markets mixed, with the Nikkei -0.8% but the Shanghai Composite has climbed another +2.2%.

European look set for a mildly negative early session, with FTSE futures -0.8% and DAX futures -0.7%. In forex, there is little direction, aside from a mild underperformance from AUD and NZD along with risk aversion. In commodities, gold and silver are consolidating, whilst oil is a shade lower by around half a percent.

It is a quiet day for the economic calendar today. The EIA Crude Oil Inventories at 1530BST are the only significant release. Oil stocks are expected to drawdown by another -3.4m barrels (after last week’s surprise -7.2m barrels of drawdown).