Gold continues to reach new all-time highs. Gold is in a gentle uptrend and could potentially continue trending higher in September 2024, provided it maintains a gentle uptrend for the first ten days. This is why.
RELATED – A Gold Price Prediction for 2024 2025 2026 – 2030.
Note that we continue to associate gold with a fear tool or a monetary inflation tool, or both.
This is in stark contrast to the majority of writers who believe that gold does well in a recessionary environment – we have never found evidence for this correlation.
Gold is a hedge in 2024
As the World Bank correctly pointed out in their piece a few months ago Gold shines amid geopolitical uncertainties:
Stronger demand for gold from emerging markets and developing economies (EMDEs), amid increased geopolitical uncertainty, is a key upside price risk.
Indeed, geopolitical tensions are certainly a catalyst for gold bullion.
However, we would add, as explained in the introduction, that an expected increase in real inflation (inflation minus expected central bank interest rates) also increases.
Therefore, this environment is excellent for gold, because both catalysts are very strong.gold friendly‘.
Gold chart in September 2024
The above-mentioned catalysts come back to the gold price graphic.
As you can see, gold is in a soft upward trend.
It is important to emphasize ‘soft’, especially because of the chart pattern of gold. As seen in the chart below, gold is rising along with the rising channel.
Gold is about to start a new three-month cycle (September – November). Our gold research shows that the first ten days of each new cycle reveal crucial price information. For example, when the previous cycle ended, we predicted that silver would not rise in the June-August period because the chart structure was unlikely to be bullish at the start of the new cycle.
Our expectation is that gold will continue to rise gently in the first ten days of September. If this materializes, we can expect a bullish bias in the next three months.
Gentle Uptrend in Gold – Sustainable or Not?
To answer the question of whether the continued uptrend in the gold sector is sustainable or not, we need to zoom out:
Always take a top-down approach to assessing trends.
The secular charts mentioned above consistently show secular breakouts. These types of pimples tend to last for a long time.
From another perspective, looking at gold’s support structure in the 2022-2023 period, the pattern that emerged during this period is very solid.
Combined with the catalysts mentioned above (rising real rates and geopolitical tensions), we believe everything is set to continue gold’s gentle uptrend, regardless of temporary gold price declines.
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