Gold is once again in the spotlight after a solid showing yesterday to kick start the new week. The precious metal moved up by 1.7% to back above $4,100 as risk appetite shows some improvement while traders are also pricing in over 70% odds of a Fed rate cut for December. That sees gold nudge up to a ten-day high but from the charts, it’s nothing too outstanding.
There is a flag/wedge/pennant building for gold this month and price action continues to hold within the confines of that as seen above. As such, that technical pattern is now going to act as a key momentum factor in determining the next big move for gold.
A breakout from the chokehold and above $4,200 will open the floodgates for gold to target the highs for the year again. The momentum will have added credence considering the strong seasonal months in December and January for the precious metal typically.
Meanwhile, a downside break will quickly see the $4,000 mark get called into question before revisiting the late October lows near $3,900
