Can Gold’s 10% rally continue to new record highs?
Gold has been enjoying the US dollar weakness in recent weeks with the yellow metal up nearly 12% since the lows of April. That makes it just 10% shy from its record high of around ~$2,074.00 on 3 August 2020.
According to some analysts, gold is still relatively cheap. In a note to clients, JP Morgan highlighted that gold is now attracting more interest from investors who are ditching bitcoin in favour of it.
From August 2020 to March 2021, gold prices had been steadily falling. The price found support at the 20-period (blue) exponential moving average and has since staged an impressive rally higher.
Most important, the price is above the key horizontal resistance line from the previous record high closing levels in 2011, as shown by the black horizontal line on the chart.
For the price of gold to continue to its record highs, the price still needs to break through significant daily resistance.
The descending resistance line from the highs of August 2020 and December 2020 is shown in the chart above.
A break above this level could result in an additional 10% move higher to its record high, making it a commodity to watch.
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