Gold: These Are the Key Levels to Watch For Now

Since I wrote my latest analysis on Nov. 14th, 2024, gold rose over the previous four trading sessions and reached at the significant resistance at 50 DMA in the daily chart.

There is no doubt that the current geo-political circumstances are likely to favor gold bulls. However, if trump's expected policies keep favoring the US dollar, the upside may be limited. 

Against this backdrop, the yellow metal has been stuck in a narrow range despite a four-day consecutive bumping move. The reason behind this bumpy move was only the fresh developments on the Russia-Ukraine war front.

On the daily chart, the gold futures could find it difficult to cross the significant resistance at 50 DMA, which is at $2665, and the formation of a double bearish crossover looks ready to be completed this week.

Secondly, if the gold futures cannot find a breakout above the 20 DMA, a sharp decline for the gold futures awaits here that could push the gold futures to retest the first significant support at $2535 and the second support at $2490.

In case of such bearish moves, gold futures could try to take a good reversal after forming a double bottom during the first week of December.

The second possible scenario could start if the gold futures find a breakdown below the second support at $2490 can push the gold futures to retest the next significant support at $2391 before a strong reversal during the Second week of December.

Undoubtedly, there are various reasons for such a bearish scenario for the gold futures, while the sudden support in Bitcoin prices indicates surging money flow from Gold to cryptocurrency. The second reason could be the increasing dollar valuations since Trump’s return to US politics.

On the other hand, Bitcoin seems to be in bullish territory, which could push the prices above $100000 shortly before the advent of a downward trend.

Finally, I conclude that the gold futures could witness heavy volatility during the next few weeks. Undoubtedly a significant support at $2525 could provide a strong bouncing move to the gold futures.

Disclaimer: Traders are requested to take any position at their own risk as the volatility could break all possible supports and resistances in the current geo-political scenario.