Gold Updates Level to $4372

[Ben Graham]

Gold and silver prices have remained near record highs after lower-than-expected inflation in the U.S. supported forecasts for further interest rate cuts. Platinum has approached its 17-year peak.

On Thursday, the spot price of gold reached approximately $4372 per ounce, signaling growth for the second consecutive week. According to data published on Thursday, the core Consumer Price Index in the U.S. increased at its slowest pace since early 2021, confirming the need for lowering borrowing costs—a factor that favors the price rise of non-yielding precious metals. Against this backdrop, investors are once again focusing on signals from the Federal Reserve regarding future monetary policy. Traders currently estimate the probability of a rate cut in January at around 25%. It is worth recalling that U.S. President Donald Trump is actively advocating for rate cuts next year and is seeking to install his loyalist, who shares his views, as the new Fed chairman.

Despite the current optimism, analysts warn of potential corrections in the precious metals market. Technical indicators are signaling overbought conditions, and a sudden shift in investor sentiment or a reassessment of economic forecasts could trigger price declines. Nevertheless, the long-term outlook for gold and silver remains positive, especially amid geopolitical tensions and concerns about slowing global economic growth. Platinum, for its part, is showing steady growth due to increased demand from the automotive industry.

Geopolitical tensions, particularly in Venezuela, have also heightened gold's appeal as a safe-haven asset. Trump has ordered the blockade of all sanctioned oil tankers, increasing pressure on Caracas amid the buildup of U.S. military presence in the region.

This year, precious metals have shown rapid growth, with both gold and silver poised to record their best annual performances since 1979. Silver has more than doubled in price, while gold has surged by about two-thirds, thanks to active central bank purchases and inflows into gold-backed exchange-traded funds.

Regarding the current technical picture for gold, buyers need to break through the nearest resistance at $4372. This would enable targets toward $4432, above which it would be quite challenging to break. The most distant target would be the area of $4481. In the event of a decline, bears will attempt to regain control over $4304. If successful, a breakout from this range could deal a severe blow to the bulls' positions and push gold down to a low of $4249, with the potential to reach $4186.

The material has been provided by InstaForex Company - www.instaforex.com