In the dynamic landscape of financial markets, certain assets continue to stand out, and gold, the age-old haven of wealth preservation, has once again emerged in the spotlight. As the Nifty is approaching near its previous high of the year 2022, gold has also demonstrated remarkable resilience and strength by moving higher than the previous high, showcasing a promising opportunity for investors seeking a secure and potentially lucrative avenue.

On the daily chart, after forming a bottom, gold experienced a rebound, crossing crucial moving averages such as the 50-day, 100-day, and 200-day MA. Last month, a resistance at 61100 levels was met, retracing nearly 50% of the decline from 56200 to 61480 levels. Notably, a golden cross materialized, where the 50-day MA not only surpassed the 200-day but also moved above the 100-day MA, underscoring a bullish sentiment. Following this retracement, gold demonstrated signs of resumption and recently broke out from the defined resistance zone of 61400-61700 levels, presenting enticing buying opportunities. 

Subsequently, as gold ascended, it crossed above the 50-week MA, signalling a resurgence in momentum. At the beginning of the year, the precious metal faced resistance near previous highs, breaking out from this defined barrier a month later. The subsequent upswing halted near 61500 in May 2023. In recent months, gold retraced near the breakout level, which now acts as robust support, facilitating the resumption of its upward trajectory. This week, a notable breakout above the previous high of 61500 has occurred, confirming the continuation of the upward movement.

Taking a technical perspective, gold encountered a significant resistance at 61775 levels, followed by a corrective decline that breached the 200-day Moving Average (MA) bottoming out near 56200 levels in October of this year. The broader picture reveals a similar pattern, with a previous peak at 56500 levels in August 2020 leading to a corrective decline. However, the precious metal found support near the 100-week MA at 44400 levels in March 2021, marking a turning point and initiating a rebound.

The subsequent upward momentum, evident in both weekly and daily charts, adds weight to the attractiveness of gold as an investment. For prospective investors, a fresh buy can be considered if gold marks a new high or can be accumulated if the precious metal remains within the consolidation range. This strategic approach aligns with the broader bullish trend indicated by the technical analysis.

In conclusion, the technical analysis of gold paints a promising picture of a resilient and upward-trending asset. The recent breakout from key resistance levels enhances the metal’s appeal for investors, opening doors to potential higher targets, with a plausible projection of nearly 64000 translating into expected returns 2.5% from the current levels and 4% from the breakout level.

– Foram Chheda, CMT