Gold Holding Above $1,900: How Long Can It Last?

Key Points:

• Gold is holding above $1,900, reaching $1,929 before a slight decline.
• The RSI indicates gold is in extreme overbought conditions.
• The next key levels to watch are $1,900 and $2,000, with potential Fed rate hikes influencing price action.

Gold has surged over $300 per ounce in the last 10 weeks, briefly consolidating around $1,800. Currently, gold is holding above $1,900, having reached $1,929 in recent trading before a slight retreat.

The hourly chart shows consolidation as gold tests and re-tests the $1,900 level, indicating its significance in technical analysis. However, the Relative Strength Index (RSI) signals that gold is in extreme overbought territory (above 70) on the daily chart and neutral (50) on the hourly chart.

Traders are eyeing further upside, with $2,000 as a potential target. This potential rise could be influenced by the US Federal Reserve’s upcoming rate decision. Recent data shows a decrease in US annual inflation to 6.5% in December, the lowest in over a year. While a 25-basis-point rate hike is largely expected at the Fed’s meeting at the end of January, a more aggressive 50-basis-point hike remains a possibility, which could impact gold prices.

In summary, gold’s ability to maintain its position above $1,900 will be crucial, with key resistance and support levels and potential Fed actions shaping its near-term trajectory.