Thanks to a recent surge in value, the timeless allure of gold is once again capturing the attention of investors. After hovering near USD 2,300 an ounce earlier this month, gold prices have been climbing steadily over the last few days, now trading around USD 2,419 per ounce as of May 21, 2024. This marks an increase of over 14% from the sub-USD 2,100 per ounce price seen in March and establishes a new record high for the precious metal.
This latest rise in gold prices is driven by a convergence of factors, including persistent high inflation and ongoing geopolitical tensions. As these and other uncertainties impact the global economy, investors are increasingly seeking refuge in the time-honored stability of gold. The precious metal’s scarcity and inherent value make it an attractive investment option in today’s uncertain economic environment.
From a technical perspective, gold is currently trading at an all-time high, reaching USD 2,419 per ounce in the international market. This surge follows a breakout from a six-week base pattern or a 26-day cup pattern, with a new high of USD 2,450.10. After meeting the target of 187 weeks of Stage-1 consolidation in just six weeks, gold consolidated for six weeks before moving higher. On May 20, the price action resulted in the formation of a shooting star pattern due to profit booking at higher levels.
Daily Chart
Weekly Chart
Several technical indicators point to continued bullish momentum for gold. The Relative Strength Index (RSI) tested the 60 mark two days ago and bounced back. The Moving Average Convergence Divergence (MACD) is showing strong bullish momentum, while the Commodity Channel Index (CCI) has moved above the prior swing high. Additionally, the Know Sure Thing (KST) indicator has given a fresh bullish signal. If gold closes above USD 2,450 in the next two days, the immediate target is USD 2,555. As long as it trades above USD 2,380, maintaining a positive bias is advisable.
With gold prices at a record high and strong technical indicators suggesting continued bullish momentum, the yellow metal remains a highly attractive investment. As investors navigate the complexities of the current economic landscape, gold’s stability and enduring value make it a compelling choice for those seeking security and potential growth.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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