Gold Pumping to $2100.

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The recent breakthrough in gold, emerging from a consolidation pattern, signals a robust bullish momentum with anticipated targets soaring towards historic highs at $2,140 and potentially surging even higher to $2,195. This bullish breakout witnessed this week could be the nascent stage of an enduring rally, eyeing the surpassing of the previous record high set at $2,135 in December.

Working on our 15th consecutive week closing above $2000, the market is gradually acclimating to the psychological $2k level, creating a solid foundation for the next upward movement. If today’s closing hovers around 2080ish, it raises the question of whether this marks a new all-time high. While it would indeed be a new closing high, it’s important to note that it wouldn’t constitute an intra-day high. Anticipating stability, it seems likely that the price will maintain at $2082.30 until Sunday night (US time).

Gold Towards Potential Historic Peaks.

Evident in this week’s price action is a remarkable augmentation in upward momentum, marked by an expansive green candle and a probable formidable close. The bullish trajectory commenced a fortnight ago when gold broke free from a bullish hammer candlestick bottom on the weekly chart, establishing a sturdy cornerstone for the ongoing rally.

Setting Sights on $2,100.

The subsequent lofty price target beyond the current zenith is around $2,100, where the completion of a ascending ABCD pattern is anticipated. The synchronization between the AB leg and the CD leg of the pattern is poised to coincide at this juncture, denoting the initial target from the pattern. However, given the prevailing momentum, there exists a substantial likelihood of surpassing this target. The 127.2% ABCD pattern target is envisaged to materialize at $2,138, perilously close to the prior record high.

Gold surged to $2,050 as PCE inflation exhibited a deceleration, concurrently with a stark warning from Putin to NATO about the looming threat of nuclear war.

The snippet reports that annual inflation, as measured by the core PCE (Personal Consumption Expenditures) and the Federal Reserve’s preferred gauge with a 2.0% target, slowed in January to 2.8%, marking the weakest pace in almost two years. Other economic indicators include a decline in pending home sales, the sharpest contraction in manufacturing activity in the Midwest since July, and a faster-than-expected rise in national claims for jobless benefits.

Market reactions include a drop in bets on the Fed’s key interest rate by traders, with the average forecast falling below 4.53%, the lowest in six sessions. Gold’s resilience is noted, trading around $2,480 per troy ounce in February. Geopolitical concerns, including the war in Ukraine entering its third year and challenges in the Israel-Hamas conflict, contribute to ongoing uncertainties.

Russian President Vladimir Putin’s annual address includes a warning to NATO about the potential for nuclear conflict, rejecting the suggestion of adding NATO troops to support Ukraine. In Gaza, negotiations for a ceasefire face challenges, with Hamas threatening to quit talks after reported civilian casualties caused by IDF troops.

Despite these geopolitical tensions, global stock markets rallied following the PCE data. Gold prices surged on the PCE inflation data, reaching three-week highs in various currencies. The Euro gold price remained close to its all-time peak, and the UK gold price in pounds per ounce rose to three-week highs. Silver prices also rebounded after a earlier drop during the week.

Triggers Orchestrating Gold’s Ascent.

Delving into the catalysts steering the recent surge in gold prices, Anuj Gupta, Head of Commodity & Currency at HDFC Securities, underscored the impact of a US inflation print surpassing expectations. This triggered profit-booking in the currency market as the outlook for the US dollar weakened. The US dollar index descended below the 104 level, concluding at 103.89 on Friday, registering an intraday loss of 0.26 percent. The relaxation in US inflation data has kindled speculations of an imminent rate cut in the upcoming US Fed meeting, further buoying the optimistic sentiment in the gold market.

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