The price of gold fell sharply last Monday, but then gradually regained lost positions. The new week begins with another correction in the yellow metal, which can be used for more profitable buying. Gold market participants are not yet ready to return to the levels of historical highs, but the current price momentum provides an opportunity for profit taking. After buying back the drawdown, the cost of the yellow metal can reach the level of 2685.
In November, the price of gold fell by more than 3%, its worst monthly performance since September 2023. The precious metals market was negatively impacted by the significant strengthening of the dollar following the conclusion of the US presidential election. Investors’ attention is now turning back to economic data, with the next major event being the US Nonfarm Payrolls report for November. The data will be released on Friday, and weak results could lead to a pullback in the dollar and a rebound in gold demand.
Robin Kolvenbach of Argor-Heraeus expects a new surge in the yellow metal’s popularity. He believes that falling prices have already led to increased consumption of physical gold by both private and institutional investors. This trend is most pronounced in India, where the population is very sensitive to the value of precious metals. Kolvenbach believes that Indian gold buyers are now more comfortable with prices in the range of $2600-2700 an ounce, especially against the backdrop of a peak of almost $2800 a month ago.
Bloomberg analysts note that the active replenishment of central banks’ gold reserves is continuing. Eastern European countries have taken the lead in this process. They are trying to protect their economies from external shocks, including possible US trade tariffs and geopolitical tensions. The Czech central bank has increased its gold holdings fivefold over the past three years and aims to reach 100 tonnes by the end of 2027. Regulators in Poland and Serbia are also steadily buying gold.
The Stochastic Indicator on the daily chart of gold is once again signalling growth. The target for the bulls could be the 2685 level.
Consider the following trading strategy:
Buy gold in the range of 2605-2630. Take profit – 2685. Stop loss – 2570.
