Gold prices will test new price highs as it remains within a long-term bullish trend. Matt Weller, who is head of market research at StoneX says that while investor sentiment may drive price action on a day-to-day basis, a glance at the bigger picture shows the bulls are easily on course to once again smash price records.
He explains, “Like most commodities, the pure ‘fundamentals’ for gold – supply and demand – change at a glacial pace,” Weller said. “While it’s certainly true that factors like central bank buying and mining techniques can influence the price of the precious metal over a multi-year horizon, on a day-to-day basis, sentiment toward the precious metal plays a far larger role.”
We have seen this happen this week with prices dipping on the back of a higher than expected inflation reading, however, this temporary drop is masking the real trajectory of the precious metal. Weller says that a key resistance level will be tested as early as next week, highlighting once again just how important it is to buy gold as soon as a dip presents itself.
“Gold has formed a large, rounded bottom over the last 3+ years, with clear resistance at the record highs in the £1,655 area. Even a short-term pullback into the mid-£1,550 would not invalidate this longer-term bullish setup.”
Don’t wait for prices to hit that peak and lament your lost opportunity. Buy now.
