Golden Diamond Is Looking for a Breakthrough

Gold prices have remained neutral at $2,644 per troy ounce this week, with the market appearing to pause ahead of an anticipated sharp move. The potential for a correction toward $2,300–$2,500 or a surge to $3,100–$3,200 per ounce is backed by compelling arguments on both sides.

Last week, geopolitical developments influenced gold prices significantly. The nomination of billionaire hedge fund manager Scott Bessent as Secretary of the Treasury by U.S. President-elect Donald Trump signaled potential tariff easing on China, calming investor fears. Additionally, a fragile ceasefire between Israel and Hezbollah reduced tensions in the Middle East, contributing to a 4.0% decline in gold prices to a low of $2,605 per ounce before beginning a gradual recovery.

Macroeconomic factors also played a role in shaping the outlook for bullion. Mixed U.S. economic data led to a sharp drop in 10-year Treasury yields to 4.17%, down from November's six-month high of 4.50%. Lower borrowing costs and a weakening Dollar provided support for gold, as Federal Reserve Chair Jerome Powell emphasized the economy’s strength, allowing for continued rate cuts. Market bets on a quarter-point rate cut in December have risen to 74.0%, up from 52.3% two weeks ago. While Powell’s tone was dovish, investors have largely dismissed it, awaiting more decisive signals.

The upcoming official Nonfarm Payrolls report on Friday is expected to be a critical market catalyst. Although November’s ADP jobs data fell short of expectations, gold prices held steady, indicating traders are waiting for a significant trigger.

From a technical perspective, gold has formed a diamond pattern—a rare but reliable indicator of trend continuation. A breakout could propel prices toward $3,100–$3,200 per ounce. Conversely, if support at $2,536 fails, prices could decline to the $2,300–$2,500 range. The pattern's near completion suggests a pivotal moment is approaching.

Large investors positioning offers no clues as well. While there is no data for the last week, the SPDR Gold Trust (GLD) showed net inflows of $676.5 million in the fourth week of November, recovering from earlier outflows of $1.69 billion earlier in the month. This shift could indicate growing support for an upside scenario.