Gold – setback is almost over.. ❓

The gold price ended the 2023 trading year with a closing price of 2,063 US dollars, increasing by around 240 US dollars or 13.1% over the course of the year. The last two weeks in December were particularly helpful for this overall very strong performance, when the gold price recovered significantly from US$1,973 to US$2,088 in a very short space of time following the FOMC meeting.

However, the prices have now come back quite a bit from these highs, with prices currently at $2,035. Despite the recovery in the second half of December, both the gold price and the entire precious metals sector are still in a corrective phase, which began with the new all-time high on December 4th at $2,149 (intraday).

At that time, the bears managed to release the pent-up pressure on the gold market with a price peak of up to $2,149 and, with the deep setback that immediately followed, painted a negative chart picture despite a new all-time high. It was only at 1,973 US dollars that the gold market found its feet again on December 13th.

This “wild” price action has not completely destroyed the bullish starting position on the gold market, but the start of 2024 has so far been rather bumpy or corrective. The new attempt to break out above the old all-time high at around 2,075 US dollars initially failed and gold prices have been pushed down to this week's low of 2,013 US dollars in the last two weeks.

On the daily chart, the repeated retracement to the broken trend line last failed on December 29th. Since then, the price of gold fell from $2,088 to $2,013. This setback has taken the daily stochastics clearly into the oversold zone, increasing the chances of a new rally.

The lower Bollinger Band ($2,011) and the psychological mark of $2,000 were narrowly missed on Thursday. However, the 50-day line ($2,014) served as support and springboard, so that on Friday morning the gold price was already more than $20 above Thursday's low.

And even if this low is tested again, the bears don't have much room left. In the worst case scenario, the gold price is likely to find a footing at the former downward trend line in the area between 1,980 and 1,985 US dollars in January at the latest.

Alternatively, the bulls are already starting their next attempt at the all-time high at around $2,075 from the zone between $2,000 and $2,015.

Nevertheless, the top side is also riddled with resistance. The upper Bollinger Band ($2,074) is hovering around the old all-time high. Additionally, the downtrend over the past two weeks is around $2,050.

Overall, the gold price has come back quite a bit and is already providing entry opportunities again. With seasonality favorable through the end of February and the US dollar continuing to weaken, a fresh rise to at least $2,075 and beyond would be the most likely scenario.

Summary Gold - setback is almost over

We suspected that the gold price would first have to consolidate between $2,000 and $2,075 for a while.

This is exactly the scenario that is currently playing out.

However, the setback of the last two weeks has already caused an oversold situation on the daily chart, meaning that the gold price should rise again in the coming weeks. Escalating geopolitics could also create significantly more buying pressure at any time. Only from spring will we see more headwind for the gold price again.