Gold prices could surpass all-time highs

According to Kitco - gold prices have recently demonstrated remarkable resilience and attracted investors and market analysts.

The precious metal's journey to new heights began on July 26, 2023, when the December gold futures contract opened at $2,411.70 an ounce and closed with a modest gain of 0.96% at $2,433.60 an ounce.

This seemingly unremarkable start set the stage for one of the most spectacular price rallies in gold history.

Despite initial volatility, including a drop to $2,403.80 an ounce, gold embarked on an extraordinary nine-week rally.

The culmination of this remarkable rally occurred on September 26, 2024, when December gold futures hit an all-time intraday high of $2,708.70 an ounce. This meteoric rise represented a staggering $279 an ounce, or 12.87%, gain in just nine weeks.

“After this historic rally, we turn our attention to potential retracement levels,” said Gary Wagner, an analyst at Kitco Metals, a gold market website in Canada. “Technical analysts use a variety of methods to predict price corrections, and we favor two prominent techniques.

The first method involves identifying previous price peaks, which often act as strong support levels".

“Fibonacci retracement levels are based on the number sequence 0, 1, 1, 2, 3, 5, 8, 13, 21… where each number is the sum of the two previous numbers. This sequence creates ratios that, when applied to a price chart, can indicate potential support or resistance levels. The primary Fibonacci ratio of 0.618 (and its inverse of 1.618) forms the basis of our analysis, with other important levels including 23.6, 38.2 and 78.6,” the expert said.

In recent gold price action, the 23.6% Fibonacci retracement level at $2,634.20 an ounce has proven this method. On October 9, December gold futures briefly traded below this level, with the following day seeing gold open near the retracement level and close significantly higher at $2,647.30 an ounce, up more than $21. This bullish momentum continued on October 11, when gold rose another $26.90 to close at $2,674.20 an ounce.

The rapid recovery and subsequent price increase above the 23.6% Fibonacci level suggests that gold's short-term correction may be over, said Gary Wagner.

“As the global economic situation remains uncertain and geopolitical tensions persist, gold’s appeal as a safe-haven asset is likely to continue.

Investors will be closely monitoring key technical levels and fundamental factors that could influence gold's trajectory in the coming weeks and months. Given its recent strength and resilience, gold appears well-positioned to continue its rally, potentially challenging and surpassing its recent all-time highs," said Gary Wagner.