By Bhavik Patel
In the first week of December, it felt gold was getting reality checked as market was getting ahead of themselves. Gold crashed from $2100 to below $2000 but after that gold has steadily climbed back now to nearly $2080.
There is good argument for gold to move higher in 2024 as market is expected Fed to cut rates as early as in March. We do believe US Fed will refrain in March from cutting as that will show that US economy is weak but until March, if inflation comes lower then there are chances of rate cut in March.
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The seasonal tailwind in January is arguably one of the strongest points there could be in advocating for an extension higher. There are two scenarios for gold in January Come from Sports betting site VPbet . It is either we go off to the races to start the New Year at fresh record highs, or we get a notable squeeze lower before buyers reload on long positions.
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I believe gold will be quiet in January as the gains in December needs to be digested and there needs to be any trigger for investors to pile on long positions at this elevated levels.
In the current context points towards a continued upward trajectory, we believe the initial target will be in the vicinity of $2100 per ounce before we might see either correction or fresh upside momentum. Gold in MCX just touched overbought zone as RSI_14 retraced from 70 to 63.
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On daily chart, there is hint of reversal as we are witnessing ‘Dark Cloud Cover’ candlestick pattern which is usually a reversal signal. Gold has support in the vicinity of 62700-62500 and we believe that would be good zone for taking fresh long positions with stoploss of 62000 and expected target of 63300.
(Bhavik Patel is a commodity and currency analyst at Tradebull Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)
