The gold market has surged to new record levels in 2024. The most significant movement occurred in Q3 2024, where the quarterly candle was the largest among all the year’s quarters. Geopolitical uncertainty and Fed rate cuts ahead of the US presidential election have weakened the US dollar, which are the primary factors behind this strong rally.
 

Gold prices declined after record high

After six consecutive days of record highs, the gold market is pausing as it faces technical selling pressure ahead of the weekend. Strong buying momentum briefly lifted gold price above $2,700 per ounce on Thursday, but some analysts are increasingly concerned that the rally may be overextended.

December gold futures were last traded at $2,669 per ounce, down almost 1% for the day, though gold prices remain nearly 1% higher compared to last Friday.
 

“After hitting a series of fresh record highs following a surprisingly large US rate cut, prices are showing signs of stabilizing. Some degree of buying fatigue is beginning to emerge, raising the question of whether we are close to a long-overdue consolidation or perhaps even a correction. Based on my estimates, the price could fall by 4–6% without damaging the overall bullish sentiment,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank, in a note on Friday.

Hansen added that he sees initial support at $2,670 an ounce, and if that breaks, the next level to watch is $2,547. In the worst-case scenario, gold could fall to support at $2,500.
 

Bullish Trends Push Gold Near to Projected Price Targets

The long-term chart reveals robust bullish momentum in the gold market, as highlighted in the quarterly chart below. Notably, gold broke out of a bullish pennant in 2003 after consolidating within this pattern for nearly 20 years, which propelled prices to reach record highs in 2011. Following this peak, gold entered a prolonged consolidation phase below the key yearly pivot at $2,075. Eventually, prices broke above this pivot after forming a cup-and-handle pattern, with the pivot itself serving as the neckline for this bullish formation.

The cup-and-handle pattern, along with the breakout above $2,075, has driven gold prices to new record highs, peaking at $2,685 in Q3 2024. This year has seen strong quarterly gains, with the third quarter posting the largest increase so far. The chart also highlights that the initial breakout occurred in the final quarter of 2023, setting the stage for this upward surge. Given the strong performance throughout 2024 and the record-breaking close in Q3, the final quarter of the year is shaping up to be one to watch closely.

Gold’s outperformance in 2024

Gold rose to another record high on Thursday when prices crossed $2,700/oz for the first time. Gold has risen more than 30% so far this year, outpacing the 20% gain for the S&P 500 stock index. The surge in gold prices this year is due to several factors, including robust central bank demand and retail investor interest.

The start of what's expected to be a series of Fed rate cuts by the Federal Reserve has also boosted gold. Gold futures contracts rose as much as 0.8% on Thursday morning, topping $2,700 an ounce for the first time.
 

“Gold reached an all-time high of USD 2,607/oz earlier this month, rising more than 25% year to date,” noted analysts at UBS. “It's not just the expectations of lower yields at play, with further support from macro and geopolitical uncertainties, and the continuing trend of USD diversification by central banks.”
 

Gold prices have surged this year, putting the yellow metal’s year-to-date return (30%) comfortably ahead of the S&P 500’s (20%).
 

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss. 

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.