Gold prices climbed for the seventh time in the last eight sessions, hitting a 6-month high as the US dollar fell and stocks extended a recent bout of volatility.
The gold futures with February delivery rose by 0.4% and reached 1,277.90 USD per ounce on the Comex division on New York Mercantile Exchange. The prices wiped out the loses accumulated during the year, receiving support from the negative session on Wall Street and bets that Federal Reserve will slow down its pace of tightening monetary policy.
The precious metal hit a multi-month high Wednesday but struggled to preserve its bullish momentum and pulled back.
The price of spot gold rose by 5 USD to 1,278 USD per ounce after hitting its highest level in half a year on Wednesday. The precious metal is basically at chart resistance, and a break above this likely would accelerate the gains in gold.
SPDR holdings, at their highest since August, have risen about 8 percent since touching more than 2-1/2-year lows in October.
The risk-off mood weighed on major equity indexes in the US and provided an added boost to the safe-havens such as gold.
Among other metals, silver was up 0.9% at 15.30 USD per ounce. Platinum fell by 0.78% to 788.40 USD per ounce, while palladium rose half a percent to 1,261.50 USD.
Gold price analysis
Gold has been tracking steadily higher through December. If the precious metal pushes through the band of resistance between 1,270-1,280 USD it may move on the 1,300 USD level. On the low side, there appears to be good support at 1,265 USD, and we expect plenty of buying interest round the 200 DMA [200-day moving average] at 1,251 USD.
Market volatility, as measured by the CBOE’s VIX index, is up over 9% in early action, which suggests bullish sentiment to the gold.
A negative correlation between stocks and gold may intensify and if equities remain under pressure gold could continue to see significant capital inflows. Gold may now target a band of resistance from the 1,270-1,280 USD areas in the days ahead and a breach above these levels could set the stage for another significant leg higher in price.
Silver price analysis
Silver markets broke above the 15 USD level during the trading session on Wednesday and then continued the move to the upside on Thursday. The precious metal is traded at 15.30 USD per ounce during today’s session.
The longer-term perspective for silver is bullish with expectations the precious metal to reach 17 USD level will probably, because of the resistance barrier there.
The high volatility on the forex market and depreciation of the US dollar gives strong support to the metal, so the level fo 16 USD per ounce can be conquered already before the end of the year.
However, if we break down below the 50-day EMA, then we could fall back down towards the 14 USD handle. If that level were to break down, that would be a very negative sign to say the least. Regardless though, the buyers are going to continue to try to take over this market and push to the upside.