Gold prices are at risk of ending 2024 with two consecutive monthly declines. The rally in the gold market, which was observed from February to October, stalled amid expectations of a tougher US Federal Reserve policy and a stronger dollar. Nevertheless, at sharp drawdowns traders tend to make point purchases of gold, rather than massively open short positions with the expectation of further decline. In this regard, prices have good chances for at least partial recovery to the level of 2660 in early 2025.
Justin Lowe, Forexlive analyst, pays attention to seasonal statistics. January is the best month for gold in the last decade from the point of view of quotes growth. In addition, market participants in November and December did not allow the price to break below the 100-day moving average. Fundamental support for gold will be provided by the preparation of the Chinese population to celebrate the Lunar New Year. China's residents traditionally actively purchase jewelry for this holiday.
Capital Economics expert Hamad Hussain also sees China as a key driver of the gold market in 2025. In his opinion, the demand for precious metals in the country will remain high next year. Its dynamics, as Hussain believes, will be determined by the problems with the recovery of economic activity in the country, as well as the weakening of the national currency. All this will contribute to strengthening the interest of the population and the People's Bank of China to gold.
TD Securities representatives expect a difficult start of the next year for gold prices. The slowdown in the Fed's interest rate cut cycle will limit the upside potential of quotes. Nevertheless, even without updating the historical highs, long positions on gold can still bring good profits. Prices have a good chance to rise to $2,675 per ounce in the first quarter of 2025.
As long as gold stays above the December low of 2585, the main scenario remains a rise towards 2660.
Consider the following trading strategy:
Buy gold at the current price. Take profit – 2660. Stop loss – 2585.
This content is for informational purposes only and is not intended to be investing advice.
