After a major break in gold, a bigger rally is brewing! Well-known analyst: bulls look to 2046
Driven by the weakness of the US dollar, the price of gold broke through $2,000/ounce last Friday and closed above this important level. Nicholas Kitonyi, an analyst at the well-known financial website FXDailyReport, wrote an article on Friday to analyze the future trend of gold.
Kitonyi pointed out that gold prices rallied from trend line support on Friday to hit a daily high of about $2003 an ounce. In the 60-minute chart, gold continued to trade in an upward channel.
Kitonyi added that currently, the price of gold has risen above the 100-hour moving average. Therefore, the price of gold appears to be about to enter the overbought level of the 14-hour relative strength index (RSI).
Spot gold closed Friday up $9.88, or 0.49%, at $2002.48 an ounce.
Last week, spot gold prices rose sharply by $21.83, or 1.1%, and gold prices hit $2007.57/ounce last week.
Daniel Ghali, commodity strategist at TD Securities, said the increase in expectations that the Federal Reserve's rate-cutting cycle will begin in early 2024 is the main driver driving gold prices higher.
Two charts to see the technical future of gold
In terms of short-term movements, Kitonyi said that from a technical perspective, according to the gold 60-minute chart, the price of gold appears to be trading in an upward channel. The 14-hour relative strength index also appears to be about to enter an overbought state, indicating a bullish trend.
Therefore, gold bulls will seek to extend the current rally and move towards $2007/oz, or higher than $2013/oz. On the other hand, gold bears will seek to take profits when the price of gold pulls back to around $1992/oz, or lower than $1985/oz.
(60-Minute chart of spot gold)
Kitonyi pointed out that on the daily chart, the price of gold appears to be about to complete an inverted head and shoulders pattern. The 14-day Relative Strength Index also appears to support bullish reasons, as the indicator is close to overbought levels.
Gold bulls will therefore seek to extend the current rally towards $2,024, or higher, at $2,046. Gold bears, on the other hand, will target long-term profits around $1,976, or lower, at $1,952.
(Daily chart of spot gold)
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Disclaimer: The content of this article does not represent the views of the Institute of Foreign Exchange. The content is for reference only and does not constitute investment advice. Investors operate accordingly at their own risk.