Since I wrote my last analysis on November 14, 2024, the has increased over the previous four trading sessions and reached significant resistance at 50 DMA on the daily chart.
There is no doubt that current geopolitical circumstances are likely to favor gold bulls. However, if Trump's expected policies continue to favor the US dollar, the upside could be limited.
In this context, the yellow metal remained stuck in a narrow range despite a consecutive four-day upward movement. The reason for this bumpy movement is none other than the new developments on the front of the war between Russia and Ukraine.
On the daily chart, gold futures may struggle to break through significant resistance at the 50 DMA, which is at $2665, and the formation of a bearish double crossover looks set to be completed this week.
Second, if gold futures fail to break above the 20 DMA, a sharp decline in gold futures is expected, which could push gold futures to retest the first significant support at $2535 and second support at $2490.
In the 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 begin if gold futures find a break below the second support at $2490 which may push gold futures to retest the next significant support at $2391 before a strong reversal during the second week of December.
There are undoubtedly several reasons for such a bearish scenario for gold futures, as the sudden price support indicates a significant flow of money from gold to cryptocurrencies. The second reason could be the increase in dollar valuations since Trump's return to the American political scene.
On the other hand, the appears to be in bullish territory, which could push prices above $100,000 shortly before the advent of a downtrend.
Finally, I conclude that gold futures could experience high volatility over the coming weeks. There is no doubt that significant support at $2525 could provide a strong rebound move to gold futures.
Warning : Traders are advised to take their positions at their own risk as volatility could break all possible supports and resistances in the current geopolitical scenario.
