Gold prices are moving up after the US dollar softens its upward trend. The spot gold appreciated by 0.3% at 1,247.92 USD per ounce, as of 08:25 GMT, touching its highest values in nearly five months at 1,250.55 USD in the prior session.
The US gold futures were also up by 0.3% higher at 1,252.60 USD per ounce.
The prices of the precious metal were supported by hopes that the US Federal Reserve could pause its rate hike cycle sooner than expected and as the dollar slipped after the previous session’s rally. The gold remains a good hedge against a lot of market risks.
Meanwhile, hedge funds and money managers trimmed their net short positions in Comex gold and silver contracts in the week to December 4, the US Commodity Futures Trading Commission (CFTC).
The demand of the precious metal continues, which additionally fueled the growth.
Central banks continue buying gold
The Central Bank of Hungary increased its gold reserver ten-fold, joining other ECB members states, which are increasing their investments in gold. The financial institution already holds 31.5 tons of gold, raising its share by 4.4% of its assets portfolio. This is the highest level of gold reserves for the Central Bank of Hungary in 30 years.
Although most of the Central European countries to raise their gold reserves during the last year, the main purchases of the precious metal are driven by countries like Russia, Kazakhstan and China.
Despite the big purchase gold by Hungary, the country is still a relatively small gold owner, located outside Top 50 in the world.
The leader as the largest gold holder is the US with 8,133 tonnes, while China has 1,843 tonnes and Russia has 1,998 tonnes.
Gold price technical analysis
During the trading yesterday, the gold price dropped from 1,249.58 USD to 1,244.16 USD per ounce. This morning it traded at 1,246.44 USD.
Looking at a slightly higher time-frame (1-hourly chart), the commodity has been showing resilience below 50-hour SMA and near a short-term ascending trend-line. Technical indicators on hourly/daily charts have been losing positive momentum but maintained their bullish bias, pointing to some meaningful dip-buying interest.
Hence, it would be prudent to wait for a convincing breakthrough the mentioned trend-line before confirming that a near-term top has already been formed near 1,250 USD per ounce.
If gold overcomes the resistance range of 1,248.74-1,249.36 USD, it will target reaching and testing the zone 1,254.25-1,254.57 USD. Upon success, the upward trend will continue to 1,257.89-1,258.51 USD. Technically, the break above 1,250 USD will be very significant, as this threshold is a very key point.
If the gold falls below the support zone of 1,240.21-1,239.59 USD, the next support will be the zone 1,236.27-1,235.95 USD. In case of a breakthrough, the downward trend may continue to 1,231.06-1,230.44 USD.
Silver price technical analysis
During trading yesterday, silver fell from 14.61 USD to 14.50 USD per ounce. This morning it traded at 14.57 USD.
If silver overcomes resistance zone 14.59-14.60 USD, it will target reaching and testing the zone 14.69-14.69 USD. Upon success, the upward trend may continue to the zone 14.75-14.76 USD.
If silver falls below the support zone 14.43-14.42 USD, the next support will be the zone 14.36-14.36 USD. In case of a breakthrough, the downward trend may continue to 14.27-14.26 USD.