Introduction
Gold bulls were hoping for a rally through the all-time high last week, but it looks like they will need to sit on the sidelines for a while longer before that happens. Gold futures have performed well so far in 2024. Gold prices have risen approximately 15% year-to-date, reaching new highs.
J.P. Morgan’s research indicates that gold prices are expected to continue rising, potentially averaging $2,500 per ounce by the fourth quarter of 2024. This bullish outlook is supported by ongoing geopolitical uncertainties, inflationary pressures, and central bank buying, which are likely to sustain the demand for gold as a safe-haven asset (J.P. Morgan | Official Website).
Technical Analysis
In the daily chart above we can clearly see the attempt bulls made to push the price above precious all time highs which were reached in APril of this year. The price retraced quickly and formed a false breakout after two bearish candlesticks.
The chart is not bearish by any means, but there are a few things important to consider before we take positions.
First, the RSI has a bearish divergence, which is telling us to wait out before taking too long because we may see some sideways movement for a period of time.
Secondly, the false break was bringing the support zone back into play at $2,300.
Trade Opportunities
Traders looking to take longs in GC could wait for price to retrace into the support zone at $2,300. Price movement below $2,270 would likely lead to lower prices from there, so it could be a good place to set the stop loss.
At the moment, shorts are not a high probability setup based on the daily chart because even the move down to the support zone may not occur. Basically, we are looking for some support to form now (which could be before the support zone is hit) before we take longs.
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