Gold shatters $3,440 resistance setting new all-time high at $3,500

Gold ended the summer with a strong bullish surge, finally breaking through the robust $3,440 resistance on its fifth attempt after being rebuffed for over four months. Notably, there were no signs of weakening buying momentum at the start of Monday's session. The bulls' primary objective is now to challenge the historical high of $3,500, making a correction in the metal unlikely until that level is reached. 

Although the RSI is approaching overbought territory, it has not yet generated a sell signal. Conversely, the MACD has only begun its ascent into the positive zone, suggesting that the potential for a further upward move is far from being exhausted. The breakout from a converging triangle pattern on the daily chart indicates this may be just the onset of a new medium-term growth wave.

On Friday, traders remained unfazed by US Personal Consumption Expenditures (PCE) data, maintaining their expectations for a Federal Reserve rate cut at the September 17 meeting. These dovish forecasts could be further bolstered by the August labor market report on September 5, where the number of new jobs is set to stay below 100,000 for a fourth consecutive month—a trend not seen since the start of the COVID-19 pandemic. 

Against this backdrop, Bank of America analysts have reaffirmed their bullish forecast for gold, projecting an average price of $3,356 per ounce this year and $3,659 per ounce next year. Experts also foresee the bullion hitting $4,000 in the medium term. They say this is due to stable demand resulting from ongoing geopolitical unrest and the persistent US budget deficit.

The following trading strategy may come into play:

Buy gold at no less than $3,440. Take profit: $3,500. Stop loss: $3,410.