Yesterday marked a historic milestone: the spot gold price officially closed above $3,000 per ounce for the first time. While gold futures, which usually trade above spot gold, briefly tested this level last week, they failed to hold above it.
However, yesterday's close confirms a true breakout, consolidating this critical psychological threshold.
The main driver of gold's recent rise is growing economic uncertainty and the increasing risk of a recession, something I have been warning about for months.
Yesterday's events further validate these concerns, including U.S. Treasury Secretary Scott Bessent's acknowledgement of the possibility of a recession, a weaker-than-expected retail sales report and a sharp drop in manufacturing activity in New York State.
Now, let's delve into the technicals, starting with COMEX gold futures, which I find more useful for analysis than the spot price, as $100 increments in COMEX gold often serve as key support and resistance levels.
With COMEX gold futures officially breaking above the critical $3000 mark, we have entered bullish territory, meaning there are no clear resistance levels above, suggesting a more fluid path. That said, I would keep my eye on $3100 as the next target and potential hurdle.
China's gold benchmark, Shanghai Futures Exchange (SHFE) gold futures, broke the 590-640 trading range in late January, a strong bullish signal.
More recently, it confirmed this momentum by breaking a bullish flag pattern, which reinforced the uptrend. As the world's largest producer of gold (at 370 metric tons in 2023) and one of its largest consumers, China plays a pivotal role in the global gold market .