Key Takeaways:
- Gold rose 2.04% to $4,076.75 per ounce on July 21
- COMEX gold broke above triangle resistance on the four-hour chart
- Central banks added 41 tonnes in May, with Poland and China leading
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Gold rises 2% to $4,076 as Middle East tensions boost safe-haven demand
COMEX gold rose 2.04% to $4,076.75 per ounce on July 21, the biggest single-day gain in three weeks, as Middle East tensions and elevated oil prices drove safe-haven demand.
"The triangle breakout confirms the bullish trend in the near term, with holding above $4,080 keeping the door open for another attempt toward $4,200," Arslan, a finance MBA and analyst specializing in behavioral finance, said.
The metal traded at $4,080 per ounce on Wednesday, extending gains after breaking above resistance on the four-hour chart. The relative strength index moved above 70, implying strong bullish momentum. Silver rose to $59.67 per ounce, also breaking above descending trendline resistance. The Federal Reserve meets July 29-30 and the European Central Bank on July 24, with both expected to hold rates steady.
Gold remains 25.6% below its 52-week high of $5,477.79 set in January, but central bank buying continues to underpin prices. The World Gold Council reported net purchases of 41 tonnes in May, with Poland adding 18 tonnes and China 10 tonnes — its eighth consecutive monthly addition. A survey showed 89% of central banks expect to increase reserves over the next 12 months.
Gold's rally came as investors assessed developments in the Middle East and the impact of elevated crude prices on inflation and interest rate expectations. US data showed retail sales rose 0.2% in June while initial jobless claims dropped to 208,000, giving the Fed room to maintain its current stance.
Key resistance for gold sits at $4,140, followed by $4,200 and $4,278, according to technical analysis. Support is expected near the $4,080 to $4,050 region where the breakout occurred, with further downside protection at $4,040 and $3,965.
Silver, which often tracks gold's direction while amplifying its moves, faces resistance at $60.76 per ounce, then $63.24 and $65.15. Industrial demand for silver from solar energy, artificial intelligence and electronics is expected to remain above 700 million ounces this year, the Silver Institute said, outpacing supply.
This article is for informational purposes only and does not constitute investment advice.
