The chances of gold making a new high in 2024 have potentially diminished, with technical indicators pointing to further correction for the precious metal.
This outlook comes when the metal has witnessed notable volatility, which cast doubt on the possibility of gold hitting a high of $3,000.
As of press time, the yellow metal was trading at $2,630, reflecting minimal gains of 0.18% on the daily chart. However, bearish sentiment has spread over the monthly timeframe, and the perennial inflation hedge has plunged by almost 4%.
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On November 25, gold recorded its largest single-day drop since June 7, plunging by 3.4% to trade at $2,619, ending a five-session rally. The drop was a reaction to the news that Israel was nearing a ceasefire with Hezbollah, diminishing the commodity’s safe-haven appeal in times of uncertainty.
At the same time, the price movement was due to a reaction to President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary. Notably, analysts view the nominee as negative regarding trade wars.
“Some market participants see him as less negative about a trade war, considering his comments on a phased approach for implementing tariffs,” UBS Commodity Analyst Giovanni Staunovo said.
What next for gold
Following the latest price movement, gold closed below its 20-day moving average, reversing Friday’s gains. An analysis by trading expert CyclesFan in an X post on November 26 indicated that after briefly surpassing this key technical level, the precious metal struggled in the face of market uncertainty, suggesting that its recent rally may not continue.
According to the expert, gold is unlikely to hit new highs in December, as market players anticipate.
Therefore, the analyst pointed out that the next level to watch is $2,537; a decline below this point would confirm that October marked a major top for the metal, potentially signaling a decline of over 20%.
This would be a sharp shift in momentum for gold, which had been buoyed by uncertainty earlier in the year.
Trading expert Rlinda also shared the bearish outlook, noting that the metal is entering a sell-off phase due to recent fundamental factors. The trading expert warned that gold could drop to the $2,530 spot if the sell-off is confirmed. This adds to the previous warning that investors should expect bears to ‘provoke further decline.’
“Gold is returning to the sell-off phase due to the change of fundamental background. Buyers are unwinding their positions and the price is entering the sell-off zone,” she said.
Notably, before the latest developments, gold investors expected the asset to mount a possible rally towards the $3,000 mark following an impressive run in 2024. This possible move was motivated by escalating tension between Russia and Ukraine in the ongoing conflict. With the current volatility, the $2,600 support level remains crucial.
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