Gold Bulls Are Gearing Up for Another Charge Toward All-Time Highs

investing.com:

The year 2023 can be marked as notably successful for gold, boasting a return rate of just over 14%.

The surge in demand can be attributed to geopolitical tensions in the Middle East and the anticipation of the Federal Reserve shifting away from its restrictive monetary policy in the upcoming year.

This shift signifies the initiation of an interest rate cut cycle, expected to weaken the U.S. dollar and lead to a decline in U.S. Treasury bond yields.

Technically speaking, the current scenario indicates an attempt to break out from the long-term consolidation that has persisted since approximately the first half of 2020.

The most likely scenario in the current context points towards a continued upward trajectory, with the initial target in the vicinity of $2100 per ounce.

In the first quarter of 2022, the Federal Reserve initiated one of the most robust cycles of interest rate hikes in decades, elevating the range from zero to 5.25-5.50% by July.

This trajectory was already factored in earlier in 2021, acting as a significant impediment to gold's dynamic bull market and ushering in a phase of an extended sideways trend.

Not even the war in Ukraine provided substantial support, triggering only a weak upward impulse. The overarching determinant remains the policies of major central banks, led by the Federal Reserve.

Currently, the macroeconomic environment coupled with the rising geopolitical tensions seem to be creating a combination conducive to a free-flowing bull market.

The Federal Reserve's latest meeting confirms the scenario of the end of the hike cycle and the execution of a pivot with 4 reductions next year.

The situation in the Middle East remains tense, which seems to be underscored by Benjamin Netanyahu's words