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Gold Daily Price Analysis – Record High Gold Prices Driven by Central Bank Demand and Mounting Geopolitical Risks

  • 3 mins read ●
  • Published:
gold market analysis 3

Escalating geopolitical tensions, particularly the threat of conflict between Iran and Israel, have intensified investor interest in gold as a safe-haven asset.

Key Points

  • Gold hit a potential 17th record high, reaching $2,397.12 with a 1.05% daily increase.
  • Strong demand from central banks and sustained interest from China and India support high gold prices.
  • Gold remains above the 200 EMA in a strong bullish trend, though a drop below key levels could signal a reversal.

Gold Daily Price Analysis – 12/04/2024

Gold prices reached a new pinnacle in Friday’s trading session, marking a possible 17th record high, with the open price slightly edging up from the previous close to $2,376.85 and the metal currently trading at $2,397.12, reflecting a rise of 1.05% for the day so far.

The recent rally in gold, much like Silver’s rally, which began in early March, appears to be fueled by multiple factors. Firstly, expectations of U.S. interest rate cuts have been a significant driver. Despite robust U.S. economic indicators such as strong job figures and higher-than-expected consumer prices, the Federal Reserve’s potential easing of monetary policy remains a critical focus. 

Thursday’s report of lower-than-expected producer prices significantly lifted investor sentiment toward gold, resulting in the metal closing at $2,376.90 after opening at $2,335.77, an increase of 1.89%. This boost is linked to the fact that lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive as an investment.

Moreover, geopolitical tensions are escalating investors’ flight to safety. The looming threat of an imminent attack by Iran on Israel has spurred safe-haven buying. This tension is rooted in recent incidents, including an attack on a diplomatic facility in Syria, which resulted in the death of an Iranian general, reportedly by forces aligned with Israel.

On the demand side, strong purchases by central banks and sustained interest from individual investors, particularly in China and India, continue to underpin the market. Analysts from Sucden Financial highlight that this robust demand, coupled with speculative investments, is expected to keep gold prices buoyant.

Key Economic Data and News to Be Released Today

As the trading day progresses, market participants will keenly await further economic releases that could influence the direction of gold prices. High-impact data such as consumer sentiment indices and further updates on U.S. interest rates will be particularly in focus. Positive economic data may temper the rally somewhat by boosting investor confidence in riskier assets, whereas negative data could further the case for lower interest rates and enhance gold’s appeal.

Investors will also continue to monitor geopolitical developments closely. Any escalation in tensions could drive further safe-haven purchases, potentially pushing prices beyond the $2,400 mark observed today. Conversely, any signs of easing tensions might lead investors to reduce their gold holdings in favor of more yield-bearing assets.

Visit our Economic Calendar

Gold Technical Analysis – 12/04/2024

Gold is currently exhibiting a strong bullish trend, consistently trading above the intraday 200 EMA. This positioning above the 200 EMA indicates that gold may continue to breach resistance levels while maintaining support levels, suggesting sustained upward momentum.

gold 15m chart
Gold 15M Chart – 12/04/2024

Additionally, the RSI offers further optimism for bulls. The RSI has not yet reached the overbought territory, implying there is still potential for upward movement in the price of gold.

However, traders should remain cautious of a potential shift in trend. A break below the pivot point and the 200 EMA could signal a bearish reversal.

Gold Fibonacci Key Price Levels 12/04/2024

Short-term traders planning to trade gold today should keep a close eye on the following key price levels for the day:

SupportResistance
2338.7242378.463
2326.4482390.739
2306.5782410.608

Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.

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