Gold's nine-month rally is at risk of ending

Last week, gold recorded its strongest weekly performance since the regional banking crisis in 2023. However, the precious metal's nine-month winning streak is at risk of ending as November ends, according to James Stanley, senior market strategist at Forex.com.

“Last week was an impressive week for gold with spot prices rising 5.98%. This was a clear and decisive response from buyers after a correction that began in early November,” Stanley said.

However, Stanley noted that geopolitical dynamics have contributed to the rally, specifically the escalation in the Russia-Ukraine conflict. While key support levels remain in place, this momentum is not always guaranteed as December approaches.

“The $2,538/oz level is the 50% retracement of the June-October rally and has so far held at a two-month low for spot gold. Last week, gold rallied every day before starting this week with a sharp correction,” he said.

Stanley said that while the bulls dominated last week, this week was a different story. “Soon after the market opened, gold tested above $2,720/oz but was quickly pushed back by the bears, returning to the previous support zone at $2,660-2,666/oz.

After another bounce from this area, sellers were ready to push prices lower to the resistance level of $2,685/oz. When the US market opened on Monday, sellers stepped up, pushing prices close to $2,600/oz before the decline slowed down a bit,” he commented.

Stanley also emphasized that throughout Monday's trading session and into Tuesday, the $2,617-2,621/ounce zone was the center of support, helping buyers seek to regain control.

Looking at the bigger picture, Stanley predicts gold's nine-month winning streak - its longest in more than 24 years - is likely to end.

“If nothing special happens in the next few days, with the Thanksgiving holiday in the US and the last trading day of the month, this upward streak looks set to break,” he said.

“However, if the buyers continue to act, it will provide clear support after the pullback. This could keep the bullish trend intact for gold as we head into the end of what has been a volatile year for the precious metal.”