Source: finbold
By: Paul L.
Date: Oct 05, 2024
As the price of gold soars, technical indicators suggest that the metal might be on the verge of a sustained rally towards new all-time highs.
A key feature of this outlook is the emergence of an ‘inside bar,’ which suggests price compression—a phenomenon that often signals the market is gearing up for a major move, according to analysis shared by Gold Predictors on October 5.
Inside bars typically precede breakout moves, especially when the broader trend remains intact, as is the case for gold. In this instance, gold has experienced upward price momentum, primarily due to growing geopolitical tensions in the Middle East.
Based on the analysis, a crucial level to watch is $2,075, which the analysts identified as a major pivot. This level has been tested repeatedly, and the most recent breakout past it led to a substantial rally.
Despite this initial surge, Gold Predictors believe the move is far from over. In their view, the market is merely pausing before embarking on the next phase of its bullish advance.
The current price compression may be the precursor to a new high in gold prices, especially as the metal continues attracting safe-haven demand in the current macroeconomic environment.
Looking at the next trajectory, the analysis cited historical price movements. For instance, back in February 2021, Gold Predictors identified $1,680 as a critical inflection point, serving as strong support during market corrections. The price bounced from that level, and since then, gold has been in a well-defined uptrend, breaking through several resistance levels on its way to the $2,075 pivot.
Gold’s path to $3,000
If the bullish momentum is confirmed, investors are targeting a possible high of $3,000 as the next record for the precious metal. Indeed, the yellow metal experienced a short-term pause in its rally towards $2,700 due to stronger-than-expected September U.S. jobs data.
In this case, U.S. job growth accelerated in September, and the unemployment rate dropped to 4.1%. This development dented hopes for accelerated rate cuts by the Federal Reserve in November. Notably, part of gold’s current rally was initiated after the Fed enacted a 50 basis point cut for the first time in four years.
Despite the short-term pullback, gold continues to experience one of its best annual performances. According to a Finbold report, this trend is highlighted by the fact that related exchange-traded funds have recorded massive inflows, putting the metal on track for its best performance since 1979.
Elsewhere, according to an analysis shared by Zerohedge in an X post on October 5, the metal is showing resilience, refusing to sell off and remaining in a narrow trading range just below its all-time high. The analyst noted that this trading pattern has emerged despite the U.S. dollar reaching its strongest level in two months. To this end, gold is consolidating in a defined zone, stabilizing around $2,653 per ounce.
The price has repeatedly tested support and resistance within this zone with no clear breakout. This consolidation suggests that the market is waiting for a catalyst before moving.
Interestingly, not all market participants are fully bullish on gold. Some warn that the current rally might be short-lived based on technical indicators and the outcome of the upcoming U.S. presidential elections.
