Gold prices have lost their upward momentum and have retreated from their peaks, facing a sharp sell-off following Donald Trump’s victory. Now, one market strategist is warning that gold’s winning streak is under threat.
Strategist: Gold's Earnings Streak Under Threat!
James Stanley said gold had its strongest weekly performance since the regional banking crisis of 2023 last week. However, gold’s winning streak over the past nine months is at risk towards the end of the month. “Last week was a very important period for gold. Spot gold prices gained 5.98%. This is a clear response from the bulls after the decline in early November,” Stanley said. However, the strategist noted that tensions between Russia and Ukraine have revived buyers. While noting the impact of geopolitical developments on price action, he questioned the certainty of this driver coming into December, despite the continued support.
The strategist also noted the following levels: “$2,538 is the 50% retracement level of the June-October move, and at this level, spot gold prices have held their lowest level in two months so far. Gold gained every day last week before a more aggressive pullback this week.” Stanley noted that bulls controlled prices last week, but this week could be different.
Evaluating the latest developments in gold prices, the strategist draws attention to the following points:
“The first move of the week tested $2,720, but sellers quickly stepped in, taking the price down to $2,660-$2,666 (still valid). There was a bounce from that area, but sellers were looking to form a lower high, using the previous support at $2,685 as resistance. As U.S. markets opened on Monday, sellers made a big move, taking the price to just above $2,600, and selling slowed down a bit.”
Throughout Monday and Tuesday, “everything was focused on the $2,617-$2,621 area,” Stanley said, adding that support played a key role before the bulls regained control.
“The four-hour gold chart gives me a clearer picture. It is important for buyers to regain control and win the $2,660-$2,666 zone. Also, support at $2,617-$2,621 could form a short-term resistance point given the recent pullback.”
Looking at the bigger picture, Stanley says gold is likely to snap its nine-month winning streak. This is the longest in 24 years. “If there is no aggressive move in the next few days, the US Thanksgiving holiday could cause this streak to break,” Stanley said. “However, the lower wick on the monthly chart is quite wide; if buyers make more moves here, this could give a clear support response after the pullback attempt. This could keep gold bullish towards the end of the year.”