(Kitco News) – Gold enjoyed its strongest weekly performance last week since the regional banking crisis in 2023, but the yellow metal’s nine-month streak of gains is at risk going into month-end, according to James Stanley, senior market strategist at Forex.com.
“Last week was a big week for gold,” he wrote. “With spot gold prices gaining 5.98%, it was a clear and decisive response from bulls after the pullback that had taken over around the November open.”
However, Stanley said there was some geopolitical momentum behind the move as an escalation in the Russia-Ukraine brought buyers back into the mix, and while key support has held, this driver is not a given as December approaches.
“The 2538 level is the 50% retracement of the June-October move and, so far, that’s held the two-month low in spot gold prices,” he said. “Gold gained each day last week before opening this week with an aggressive pullback.”
Stanley said that while bulls were in control of prices last week, this week was a different story.
“The initial move after the weekly open tested above 2720 but sellers hit that quickly, driving down to a zone of prior support at 2660-2666 (which remains relevant),” he wrote. “After another bounce from that zone, sellers stood ready to hit a lower-high with resistance at prior support, taken from the 2685 level. And then, as US markets opened for the day on Monday, sellers made a big push, driving all the way down to just above the 2600 level, which is where the sell-off finally started to slow, a bit.”
He noted that for the duration of Monday’s trading and into Tuesday, “it was all about the 2617-2621 zone which, ultimately, helped to cauterize support before bulls took another shot at regaining control of the situation.”
“The four-hour chart appears a bit clearer to me, but it also highlights the importance of buyers regaining control and taking out the 2660-2666 zone,” he said. “And given the recent grind with support at 2617-2621, there’s a spot of short-term resistance that could be used for higher-low support, plotted around 2632.”
Turning to the big picture, Stanley said that gold’s nine-month winning streak – its longest in over 24 years – is likely to end.
“Unless something aggressive happens in the next couple of days, with the Thanksgiving holiday in the U.S. leading into the final trading day of the month, it looks as though that streak may be broken,” he said. “But – the underside wick on the monthly chart is already fairly wide – and if buyers do put in more of a dent here, that would be a clear support response after a pullback attempt, and that’s something that could keep a bullish bias for gold prices as we move towards the end of what’s been a big year for the metal.”
Spot gold rallied from $2,620 per ounce to around 8 pm EST on Wednesday evening to a high just under $2,650 shortly after 6 am on Thursday, but slid lower as the day progressed.
Spot gold last traded at 2,637.60 per ounce for a virtually flat performance on the session.
