Gold’s upwards climb has continued rather impressively, but the precious metal is now challenging important resistance and questions about moderation.

As of this writing Gold is trading near the 1847.00 mark, this after attaining the 1865.00 ratios on early Wednesday. Although Gold has reversed slightly lower in the past twelve hours its run upward has been significant, taking into account that the precious metal was at nearly 1615.00 on the 3^rd of November. Traders who correlate the advance higher in the price of Gold to the weakness in the USD have a definite case to make.

On the 22^nd of December, the price of Gold was at nearly 1785.00 and its move to yesterday’s highs has been remarkable, but it has also occurred during the holiday season. The possibility exists that the purchasing of Gold has caught the mark off balance the past two weeks. While Gold has certainly shown strength and this can fundamentally be compared to the weakness of the USD in the past couple of months, the question arises if the move is now overdone for the precious metal in the near term.
 

Gold is now Testing Prices it has not traded since June of 2022

Speculative buying zeal has helped propel Gold higher as some traders may have jumped into long positions via fear of missing out on the trend which has gathered momentum.   However, if the correlation to the USD is true, yesterday’s U.S. Federal Reserve Meeting Minutes report may pump the brakes on the recent price velocity and create questions about moderation.

• The U.S Fed Meeting Minutes report highlighted their plan to remain vigilant regarding inflation and raise interest rates if they see price movements higher in equities and pressures from other economic data.
• Financial houses are keen to see how the U.S. central bank will react to inflation data that will be published over the next couple of months.
• If U.S. inflation shows it is moderating, financial institutions will want to see the U.S. Federal Reserve continue to be less aggressive regarding interest rates.
   

Short-Term Speculative Buying of Gold may start to Produce a Choppy Range

The move higher in Gold the past week is intriguing.  On Tuesday of this week, Gold was trading near the 1826.00 level and then began to develop strong buying action which created yesterday’s high. The reversal lower in Gold since the high and after the U.S Fed Meeting Minutes is a cautionary flag for short-term traders.

While the bullish trend in Gold has been solid since early November, the highs being tested now may run into resistance as speculators question the outlook. Gold may find speculators wagering on downside price action in the near term if they feel the precious metal has shined a bit too brightly the past couple of weeks. Support near the 1842.00 to 1840.00 ratios may become a selling target.
 

Gold Short-Term Outlook:

• Current Resistance: 1853.00
• Current Support: 1845.00
• High Target: 1871.00
• Low Target: 1828.00

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