As gold prices surged yesterday, market watchers are questioning whether this marks the end of the recent correction phase for the precious metal. The increase is currently seen as a cautious counter-movement within a broader downward correction, which still holds significant potential for further decline.
A Look Back: Since October last year, gold has been on an upward trajectory after successfully defending a crucial mid-term support level at $1,807. The momentum increased starting February, peaking at a target price of $2,415 and setting a new record high at $2,431. Since then, the second rally phase has primarily been undergoing a sideways correction, testing the support area at $2,267. From this zone, gold bounced back yesterday, approaching the underside of the previously broken upward trend line at $2,345.
Technical Outlook: If gold rebounds downward from the trend line, it could lead to further corrections down to $2,267 and potentially to the previous all-time high of $2,222. This could mark a temporary halt to the correction, possibly triggering a sharp buying spree. However, if gold breaks below $2,222, we could see declines extending to $2,145 and $2,100.
On the upside, a return above the trend line would be considered bullish. A sustainable rally could be confirmed with a rise above $2,355, potentially igniting a buying wave that could revisit the highs between $2,415 and $2,431.
Market participants remain vigilant, as the dynamics of gold’s movements continue to unfold, with various scenarios on the table depending on its ability to sustain or break through key technical levels.
