At the turn of this century, gold was trading below $300 per ounce. The yellow metal traded to a low just above $250 in 1999 and 2011 as the Bank of England liquidated half the United Kingdom’s holdings. London is the hub of the international gold market. While the UK auctioned off their national treasure, other central banks and governments did not follow. Moreover, they have been net buyers of the precious metal over the past two decades, increasing their holdings.
In 2019 and 2020, the gold price rose to all-time highs in virtually all currencies. The final shoe to drop was the rally to $2063 per ounce on the nearby COMEX futures contract in August 2020.
Gold has backed off since the August 2020 high
An almost perfect bullish storm propelled gold higher in 2019 and 2020.
The chart highlights gold broke out above its July 2016 $1377.50 high in June 2019. The move above critical technical resistance propelled gold higher. After a risk-off inspired dip to $1450.90 in March 2020, gold climbed to a record high. As the US Federal Reserve slashed short-term interest rates to zero percent and reinstituted quantitative easing, gold posted steady gains. Moreover, a falling dollar index pushed the precious metal to a high of $2063 in August, a new record peak.
Since then, gold has corrected, and was at the $1730 level at the end of last week, over 16% below the high.
The bullish trend in gold remains intact
Even the most aggressive bull markets rarely move in straight lines. On the monthly chart, the first technical support level stands at the March 2020 $1450.90 low. The midpoint of the move from the March 2020 low to the August 2020 peak stands just under the $1757 level. Gold remains not far below that level, which is now short-term technical resistance.
Meanwhile, the bullish trend that began in the early 2000s remains firmly intact.
In 2019 and 2020, the gold price rose to all-time highs in virtually all currencies. The final shoe to drop was the rally to $2063 per ounce on the nearby COMEX futures contract in August 2020.
Gold has backed off since the August 2020 high
An almost perfect bullish storm propelled gold higher in 2019 and 2020.
The chart highlights gold broke out above its July 2016 $1377.50 high in June 2019. The move above critical technical resistance propelled gold higher. After a risk-off inspired dip to $1450.90 in March 2020, gold climbed to a record high. As the US Federal Reserve slashed short-term interest rates to zero percent and reinstituted quantitative easing, gold posted steady gains. Moreover, a falling dollar index pushed the precious metal to a high of $2063 in August, a new record peak.
Since then, gold has corrected, and was at the $1730 level at the end of last week, over 16% below the high.
The bullish trend in gold remains intact
Even the most aggressive bull markets rarely move in straight lines. On the monthly chart, the first technical support level stands at the March 2020 $1450.90 low. The midpoint of the move from the March 2020 low to the August 2020 peak stands just under the $1757 level. Gold remains not far below that level, which is now short-term technical resistance.
Meanwhile, the bullish trend that began in the early 2000s remains firmly intact.