Gold Futures Soar as Potential for Further Upside Emerges

Gold futures are poised to reach record highs, indicating the potential for further gains in the precious metal market. In Friday's trading session, gold for February delivery climbed by $19, or 0.9%, to $2,076.20 per ounce on Comex. This price surge brings gold futures closer to a so-called "golden cross," a technical indicator that suggests an upward trend.

Based on the most-active contracts, the settlement price is expected to surpass the previous record-high finish of $2,069.40 on August 6, 2020, marking a new all-time high. Intraday trading reached as high as $2,081.70 on Friday, with an intraday record of $2,089.20 set on August 7, 2020.

Brien Lundin, the editor of Gold Newsletter, explains that while the current rally may be considered overheated, the combination of the golden cross and the proximity to an all-time high creates a strong attraction for investors. This suggests that further gains are likely in the immediate future.

Stay tuned as the gold market continues to offer exciting opportunities for investors seeking to capitalize on its upward momentum.

Gold Futures Close to Reaching 'Golden Cross' Indicator

The most-active gold futures are inching closer to a significant bullish indicator known as a "golden cross." This occurs when an asset's short-term moving average moves above its long-term moving average. As of Friday afternoon, the 50-day moving average stood at $1,954.79, just below its 200-day moving average of $1,955.35.

Gold Prices Surge Amidst Weaker US Dollar and Subdued Treasury Yields

Gold prices have continued to surge above the psychologically important $2,000 level, thanks to a combination of factors including a weaker U.S. dollar and subdued Treasury yields. Lukman Otunuga, the Manager of Market Analysis at FXTM, emphasized these key drivers.

Federal Reserve Interest Rate Cut Bets Provide Support

Otunuga also highlighted that gold remains supported by expectations of interest rate cuts by the Federal Reserve. This is despite Fed Chairman Jerome Powell's recent indication that it is too early for the Fed to declare victory over inflation. The market analysis manager reaffirmed the importance of upcoming key data, such as CPI and jobs data, in influencing the Fed's decision to cut interest rates in March.

Technical Throwback Possible before Gold Pushes Higher

Otunuga pointed out that given the Relative Strength Index (RSI) on the daily charts remaining in overbought territory, gold could experience a temporary pullback before continuing its upward momentum.

Overcoming Resistance Crucial for Gold's Future

In addition, Lundin warned that unless gold is able to decisively break through a new plateau, likely somewhere above $2,100 per ounce, it may encounter a significant obstacle in the form of a "quadruple top," indicating a potential reversal in its upward trend.

These developments indicate promising prospects for the gold market, with attention focused on how it will navigate through current challenges and sustain its positive momentum.