New Year, old Habits - Gold is on the rise again

The first day of trading, which started yesterday in Australia, has seen exponential growth in bullish market sentiment on the Gold Price. Although the factors that drove the price of gold just above $ 50 on the first day of trading in 2021 have been around for quite some time. However, real concerns about vaccination wiping out coronavirus and the length of time it takes to do so, coupled with the enormous capital the US Treasury Department has already allocated to fiscal stimulus, has become the primary focus of traders and market participants. This can be easily seen in today's activity in the financial markets, where US stocks are under tremendous pressure. Although the Dow Jones rebounded from its lows, it lost 382 points in today's trade, a 1.25% decline. Similarly, the Nasdaq Composite was down 1.47% and the S&P 500 was down 1.49%. This type of strong bearish sentiment and selling in US stocks underscores the real concern of market participants that the economic recovery may take much longer than many expected, and coupled with the economic impact of massive US Treasury spending and extreme The Federal Reserve’s accommodating monetary policy are the necessary components of a perfect storm scenario that could drive gold and silver up dramatically from current prices. Though the US dollar closed essentially unchanged, it is currently below 90 at 89.87 after today's 0.03% decline, and market participants today were active buyers in both gold and silver, both of which are significantly higher brought. As of 5 PM EST, the most active February contract for gold futures is currently $ 51.60 (+ 2.72%) higher and pegged at $ 1946.70. Silver also had a great performance today, rising $ 0.97 an ounce, or 3.68%, bringing the white precious metal to $ 27,385. The market events on a technical basis provided traders today with confirmation that the upward trend is not only intact, but also has the energy to push prices to a higher level. The first important observation is that the price of gold opened just above its 100-day moving average, which is currently at $ 1901.70. Second, the price of gold broke through and closed above a major resistance area based on the Fibonacci retracement. The data set used for this retracement begins in mid-March when Gold Prices bottomed at $ 1450 and ends in the first week of August when gold prices hit its all-time record high of $ 2088. The 23.6% fibonacci retracement is currently pegged at $ 1937.90, and gold closes well above it, currently pegged at $ 1946.70. The 23.6% Fibonacci retracement is the final retracement level between the current price and the all-time record high. This means we have smaller levels of resistance based on recent price highs that were unsustainable. The first level of minor resistance is at $ 1961, the high reached in the second week of November. The next minor resistance was reached in mid-August when the price of gold was around $ 2023 an ounce. The main resistance in absolute terms is at $ 2088, the all-time high hit in the first week of August. Today's dramatic spike in both gold and Silver Prices represents the real potential for the current rally to gain momentum and move quickly to the next level of potential resistance. The chart included in this article shows the four primary levels at which gold could find resistance based on recent highs in the price of gold.