Gold Prices Analysis: Is Gold Set to Breakout or Retrace?

Gold is currently trading around $2,049 an ounce, hovering near the same levels seen in September 2024. This stability raises questions about the precious metal's next move, with technical indicators pointing to key support and resistance levels that traders should watch closely.

Gold Price Support Levels

On the downside, gold finds technical support near $2,600. A break below this level could trigger further declines, with the price potentially dropping to $2,550 per ounce. If bearish momentum persists, a retest of the November low at $2,536 per ounce may be on the cards.

Gold Price Resistance Levels

Looking upwards, gold faces resistance at $2,665, with further resistance identified along the upper trendline of the wedge pattern on the daily chart. This trendline currently aligns with $2,680 per ounce. A breakout above these resistance points could attract more buyers, creating a potential rally toward $2,725 per ounce.

Potential for a Breakout?

Should gold successfully breach the $2,680 resistance, it may trigger a breakout scenario, leading to a surge in buying interest. This could propel prices higher, making gold a focus for investors seeking to capitalise on bullish momentum.

Long-Term Gold Price Forecast

The big question remains: where next for gold? Some Wall Street analysts predict that gold prices could hit $3,000 per ounce in 2025, driven by macroeconomic factors and continued interest in safe-haven assets. However, demand has softened recently, particularly following the US presidential election, as investors have shifted focus toward riskier assets.

Key Takeaways for Traders

• Support Levels to Watch: $2,600, $2,550, and $2,536 per ounce.
• Resistance Levels to Watch: $2,665, $2,680, and $2,725 per ounce.
• Upside Potential: A breakout above $2,680 could see gold targeting higher levels, potentially reaching $3,000 per ounce in the long term.
• Downside Risks: A failure to hold support at $2,600 may see prices retesting lower levels.

For now, gold remains at a critical juncture. Whether it moves higher or retests its lows will depend on upcoming economic data, geopolitical developments, and broader market sentiment. Stay tuned for further updates on gold's price movements.