- Gold prices surge past $2750 per ounce on record inflows into gold funds. Gold ETFs saw a massive $3 billion investment last week, the second-largest increase ever.
- Year-to-date gains for gold are at 33%, setting the stage for its best year since 1979.
- Despite a strong US dollar, gold’s rally remains unfazed, with safe-haven appeal outweighing dollar strength amid rising global uncertainties. This trend looks set to continue.
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Gold prices have smashed through the 2750 handle once more following a drop over the weekend. Following the weekend, Gold opened around 2732 before moving higher to within striking distance of the all-time highs.
The safe haven appeal appears to have returned following comments yesterday by Iranian authorities that they have the right to respond to the Israeli response over the weekend. The comments seem to have reignited the appetite of market participants for the precious metal.
Gold ETF flows are another reason that could explain the resilience of the precious metal since the weekend. According to data, gold funds received about $3 billion in new investments last week, making it the second-largest increase ever. This is more than three times the usual amount seen in recent weeks. This is continuing a trend which started during the summer months following a brief lull in demand.
The ETF and Gold fund flows have helped the precious metal maintain its gains for the year, which stands at around 33% YTD. This leaves the precious metal on course for its best year since 1979 at a time when Central Banks continue to increase their Gold holdings as well.
There is a barrage of US data on the docket this week which could affect Gold prices. However, recent data releases have proven that despite a strong US Dollar the Gold rally seems unfazed at present. Safe haven demand appears to be outweighing any sustained US Dollar strength as global uncertainties continue to pile up.
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Technical Analysis Gold (XAU/USD)
From a technical analysis standpoint, Gold does need a daily candle close above the 2750 handle which has proved elusive thus far. A daily candle close above 2750 should embolden Gold bulls and facilitate a push toward the $2800 handle and print fresh all-time highs.
GOLD (XAU/USD) Daily Chart, October 29, 2024
Source: TradingView (click to enlarge)
Looking at the H4 chart below, the precious metal has closed above the 2750 handle twice bu failed to kick-on. Hence my thought process that a daily candle close above the psychological handle could assist bulls in pushing prices higher.
Immediate resistance rests at the most recent highs around 2758 before the 2775 and 2800 regions come into focus.
Conversely, a break back below the 2750 handle has to navigate support at 2738 and 2724 respectively before the chance of a retest of 2700 becomes a possibility.
GOLD (XAU/USD) Four-Hour (H4) Chart, October 29, 2024
Source: TradingView (click to enlarge)
Support
- 2738
- 2724
- 2714
Resistance
- 2758
- 2775
- 2800
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Zain Vawda
He has spent the last 3 years in an analyst role honing his skills across various financial domains, including technical analysis, economic data interpretation, price action strategies, and analyzing the geopolitical impacts on global markets. Currently, Zain is advancing in obtaining his Capital Markets & Security Analyst (CMSA) designation through the Corporate Finance Institute (CFI), where he has completed modules in fixed income fundamentals, portfolio management fundamentals, equity market fundamentals, introduction to capital markets, and derivative fundamentals.
He is also a regular guest on radio and television programs in South Africa, providing insight into global markets and the economy. Additionally, he has contributed to the development of a financial markets course approved by BankSeta (Banking Sector Education and Training Authority) at NQF level 6 in South Africa.
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