Gold prices are set to end the year 24% higher, on the back of safe-haven demand that arose from the onset of the coronavirus pandemic in 2020. In terms of volatility, this has been the most volatile year for gold prices in the last decade.
Some of the big banks have predicted gold price on the XAUUSD pair to transcend the $2,300 price level, as the newly signed coronavirus stimulus package kicks into gear in 2021 and causes a weakening of the US Dollar. Chances are that 2021 may yet hold more surprises in terms of volatility, if prices are to navigate towards the levels
predicted by the banks.
Technical Levels to Watch
As indicated in my previous analyses of gold price action on the XAUUSD pair, the emergence of the large descending channel on the daily chart is now a factor that will play a role in any further upside moves on gold prices, technically speaking.
The upper boundary of the channel intersects the 1900.76 resistance, which has limited further upside on gold. This boundary and the 1900.76 resistance will be the level to beat for bulls. Further advance in gold prices towards 1918.68, 1940.15 or 1954.77 depends on bulls being able to break this double resistance barrier.
Sub-1700 gold prices will only be possible if bears force prices below the channel’s lower boundary, in which case we would be looking at targets at 1673.96 and 1651.95.
Between the borders of the channel, downside targets exist at 1869.39, 1850.78, 1821.55 and also at 1800.34. 1762.51, 1748.40 and 1721.76 are also potential downside targets for sellers.
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Gold Price (XAUUSD) Daily Chart
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