The gold market has been experiencing a strong upward trend over the past two years, with prices increasing by nearly 70% from a low of $1,640 per troy ounce in September 2022 to a recent peak of $2,790.00.
This rise in price has made gold a popular asset among investors, especially as it approaches the significant $2,800 mark. Analysts believe that the long-term uptrend will continue as long as the price does not drop below the critical support level of $2,550.00 established in 2024. Potential dips in price could present good buying opportunities, particularly if the price remains above the low of $2,278.00 seen in late April.
As we approach the end of the year, it is expected that gold will trade between the psychological levels of $2,800 and $2,900. The target of $3,000 is significant and is derived from the Fibonacci extension of the price increase from September 2022 to May 2023. However, it is not expected that this milestone will be reached until the first quarter of 2025. The market sentiment remains positive, driven by ongoing purchases of physical gold by central banks, particularly in China, which are expected to continue until the $3,000 threshold is breached.
Recent market activity has shown volatility, with a pullback from the record high of $2,790.17 to $2,731.64. This retreat has provided a new entry point for investors and has reinforced the medium-term uptrend as long as the price remains above the low of $2,708.76 seen on October 23. Resistance levels are clearly defined, with the all-time high of $2,790.17 serving as a critical barrier. If this level is broken, it could push prices towards the $2,800 mark and beyond.
If gold continues its upward trajectory, surpassing the $3,000 mark could lead to further gains, with a potential target of $3,113.00. This figure is another Fibonacci extension calculated from the low in 1999 to the high in September 2011, projected upwards from the low in December 2015. These levels have psychological significance and can influence investor behavior and market sentiment.
Looking ahead to 2025, it is expected that the gold price will hover around the $3,000 mark for an extended period as it serves as a major psychological resistance point for many investors. The ongoing demand for physical gold, particularly from central banks, will play a crucial role in maintaining upward pressure on prices. If these purchases continue, there could be a significant rally that pushes prices towards the $4,000 mark, which is seen as a plausible upside target in a sustained bull market.
The future trajectory of gold prices will be influenced by market dynamics, investor sentiment, and macroeconomic factors. As central banks diversify their reserves and hedge against inflation, gold's status as a safe-haven asset will be reinforced. The current environment, characterized by geopolitical tensions and economic uncertainty, further enhances gold's appeal to both institutional and retail investors.
In summary, the gold market is expected to see significant developments as it approaches critical price levels. With a strong bullish trend and support from central bank purchases, the outlook for gold remains positive. Investors should stay vigilant and consider technical indicators and market sentiment as they navigate this dynamic landscape.