Gold price approaches 4,200 USD, buying pressure returns, analysts are optimistic

Last week, Alex Kuptsikevich - Head of Market Analysis at FxPro - expressed optimism about gold, saying that the sharp decline from the record level last month has caused significant damage to the technical structure in the short term.

However, in the update on Tuesday, Kuptsikevich commented that "rumors about gold's decline have been exaggerated".

Kuptsikevich said that gold's short-term overtaking of important resistance levels has created new bullish momentum in the market. He also stressed that the risk of price increases is still strengthened by global geopolitical and economic instability.

The outlook for the precious metal is not as optimistic as it was a week ago. Increased political uncertainty stemming from the possibility of the Supreme Court lifting tariffs, along with the Federal Reserves soft stance is creating a push for gold, he said.

At the same time, although gold prices are still high, the two-week correction has helped the market cool down from overbought conditions.

The October sell-off in gold is no longer considered a burst. It is true that speculators have pushed gold prices too high, too fast. However, many of them have been involved in the rally late and are selling on the feel of the risk. As a result, the market corrected. Whether this trend continues or not will depend on US economic data and the Fed's upcoming decision," he added.

Nick Cawley - Market Analyst at Solomon Global also maintains an optimistic view, saying that gold is still going up along with the stock market.

Cawley said that both gold and stocks are benefiting from growing expectations that the Fed will continue to cut interest rates next month, although Chairman Jerome Powell recently warned that further easing in December is still uncertain.

According to CME's FedWatch tool, the market currently rates the probability of the Fed cutting interest rates before the end of the year at more than 65%.

With the expected continued loose monetary policy and solid demand from physical investors, the fundamentals of gold and silver remain strong. Unless there are major fluctuations, both metals are likely to continue to rise in the coming weeks, he said.

David Morrison - Senior Analyst at Trade Nation - said that although the gold market is not currently overbought, the slow increase on Wednesday shows that some investors are still cautious in the current price range.

Overall, gold has held most of its gains since bottom last week. The daily MacD index still shows a positive signal when bouncing up from the neutral zone, showing an uptrend. However, there are also signs of concern among investors. Some believe that the correction from the record high last month is not over yet, and gold may need a further correction, given the scale of the recent rally," he said.