Gold Prices Explode Higher
You Haven’t Seen Anything Yet!
Gold is on a hair trigger! Or to put it another way, Biden’s governance has now stretched everything to the breaking point.
Spot gold had a previous record high of $2,063, but on Friday, 12/1, it closed at a new all-time high of $2,071.
Then fresh war rumors on December 4 spiked gold way past its previous high, with spot gold soaring to a record $2,146.70 overnight.
Here is the chart of December futures gold contracts on the Chicago Mercantile Exchange. You can see gold ran into resistance three times, with prices over $2,000 in August 2020, again in March 2020, and still again last May. But as this year ends, it looks very much like what was resistance at $2,000 an ounce is now supported with signs of new buying ready to enter at $2,000.
It is early, but the charts suggest an important change in the application of technical analysis to gold’s price action. Let us explain these concepts, support, and resistance, in more detail.
In the language of chartists, “support” refers to the point in a downtrend when net new buying enters the market, and a price decline comes to an end.
Conversely, resistance is the point in a rising market when new selling appears for the time being, and the price ceases to climb. It is the repetition of price movement at these points that gives them some credibility.
Investopedia describes both support and resistance this way:
Support is an area on a price chart that shows buyers’ willingness to buy. It is at this level that demand will usually overwhelm supply, causing the price decline to halt and reverse.
Resistance is the opposite of support. Prices move up because there is more demand than supply. As prices move higher, there will come a point when selling will overwhelm the desire to buy…. But a technician will clearly see on a price chart a level at which supply begins to overwhelm demand. This is resistance. Like support, it can be a level or a zone.
Some gold traders and speculators may look for certain price points as psychological entry and exits points. For the past several years, since August 2020, each time gold has climbed past $2,000 an ounce, new selling has entered the market.
It is early, but recent bullish gold action has produced new highs in both the spot and futures markets.
Technical analysis is theoretical, but we aren’t the only ones seeing this evolution in the gold price charts. Mike McGlone is Bloomberg Intelligence’s Senior Macro Strategist. He notes the same change of what was only recently resistance now like becoming support. McGlone says gold “is in the early days of a bull market,” and that “the deepest pockets on the planet are buying gold. That’s central banks.”
Speak with your Republic Monetary Exchange professional about how these technical signals can benefit you as you head for the maximum safety zone of gold and silver.