James Stanley, senior market strategist at Forex, said that despite gold's strong performance last week, posting its best weekly performance since the regional banking crisis in 2023, its nine-month winning streak is at risk as the end of the month approaches.

“Last week was a big week for gold, with spot gold prices up 5.98% as bulls responded clearly and decisively following the pullback seen in early November,” he wrote.

However, Stanley noted that there were some geopolitical factors behind the rally as the escalation in the situation between Russia and Ukraine attracted bulls back in. While key support levels held, the driver was uncertain as December approached.

“$2,538 is the 50% retracement of the June-October move and has held a two-month low so far,” he said. “Gold was rising every day last week but pulled back sharply at the start of this week.”

Stanley said that while bulls were in control last week, this week is different.

He wrote: "Shorts quickly stepped in at the beginning of this week, pushing gold prices down to the previous support area of ​​$2,660-2,666. After falling to just above $2,600 in the U.S. market on Monday, the selling pressure began to slow down."

He noted that gold was trading in a range of $2,617 to $2,621 on Monday and Tuesday. “Ultimately, this helped consolidate support before the bulls once again try to regain control.”

Looking at the bigger picture, Stanley believes gold’s nine-month winning streak — its longest in more than 24 years — may be coming to an end.

“Unless something drastic happens, it looks like this winning streak could be broken given the upcoming Thanksgiving holiday in the U.S. and the last trading day of the month,” Stanley said.

He added: “But the lower shadow on the monthly chart is already quite wide – if the bulls push further here, it would be a clear support signal after a pullback, which could keep gold prices bullish as we head towards the end of the year.”

In addition, gold prices are also supported by fundamentals. ANZ Research analysts said in a research note that the commodity market currently expects a 70% chance of a 25 basis point rate cut in December, up from 56% a week ago. At the same time, analysts said that geopolitical tensions in Europe after Russia's missile attack on Ukraine also boosted demand for safe-haven assets.

Article forwarded from: Jinshi Data