Gold enjoys another rally
2023.12.28 04:58
- Gold edges higher, surpasses 2,075 level
- Festive period fueling gold rally amidst low liquidity
- Momentum indicators support the current move
Gold is trading higher again today, recording the fifth consecutive green candle, as the low-liquidity festive period appears to be fueling demand for the precious metal. Gold is currently around 6% higher than the December 13 trough as it managed to surpass the 2,075 level and has returned above the October 6, 2023 trendline, after spending almost 20 days below it.
In the meantime, the momentum indicators are endorsing the current move higher. The RSI is rising towards its November highs, signaling an increasing bullish tendency in the market. Similarly, the Average Directional Movement Index (ADX) has made a higher high, confirming the strong bullish trend in gold. More importantly, the stochastic oscillator has crossed above its moving average (MA) and it is moving aggressively towards its overbought territory.
Should the bulls remain hungry, they could try to keep gold above the August 7, 2020 high of 2,075 and they then gradually stage a move, which might not be as straightforward as it sounds, towards the all-time high of 2,145.
On the flip side, the bears are keen to put a stop to the current upleg. They could try to defend the 2,075 level and then have a go at breaking below the April 13, 2023 high at 2,049. If successful, they could then push gold towards the busier 2,004-2,020, which is populated by the March 20, 2023 high, the 50-day simple moving average (SMA) and the 23.6% Fibonacci retracement of September 28, 2022 – December 4, 2023 uptrend.
To sum up, gold bulls remain in control of the market amidst a low liquidity period with the bears appearing unable, up to now, to react to the consecutive green candles.
