Bull Market Boosts Gold Price Near Record High: Causes Revealed

Gold and silver prices rose in the early U.S. session on Wednesday, with gold prices slightly below their all-time highs. Amid heightened geopolitical tensions, precious metals are supported by safe-haven buying, and chart-based buying supports precious metals in a bullish technical situation. December gold rose by $17.10 to $2,696.00, and December silver increased by $0.319 to $32.075.

Tensions in the Middle East continue to escalate as Israel attacked Hezbollah facilities in Lebanon overnight. The market remains concerned about how Israel will respond militarily to Iran's missile strike on Israel a few weeks ago.

So far, it has been a relatively quiet week for U.S. data. However, a large amount of U.S. data will be released on Thursday, including retail sales and weekly unemployment benefit claims reports, which could add some spark to the market.

Asian and European stock indices were mostly weaker overnight. U.S. stock indices opened slightly higher at the start of trading in New York.

Today, the U.S. dollar index, a key external market, is slightly higher. The benchmark 10-year U.S. Treasury bond yield is currently at 4.010%. Crude oil prices are a bit weak, trading around $70.25 per barrel.

U.S. economic data released on Wednesday includes the weekly MBA mortgage application survey, the import and export price index, and the monthly Treasury budget statement.

Technical analysis of gold and silver:

Technically, December gold bulls have a strong overall short-term technical advantage. The next upside price objective for the bulls is to form a closing price above the solid resistance level at the contract high of $2,708.70. The next near-term downside price objective for the bears is to push futures prices below the solid technical support level at the October low of $2,648.90. First resistance is at $2,700.00, then at $2,708.70. The first support is today's low at $2,674.90, then the weekly low at $2,654.40. Our market rating: 9.0.

December silver futures bulls have a solid overall short-term technical advantage. On the daily bar chart, prices are in a nine-week uptrend. The next upside price objective for bullish silver is to break through the solid technical resistance level at the May high of $33.50 with a closing price. The next downside price objective for the bears is to close below the solid support level at the October low of $30.345. First resistance is at $32.50, then at $33.00. The next support is expected at the overnight low of $31.60, then at $31.00. Our market rating: 7.0.

Technical application in the trading market - the use of stop-loss orders:Stop orders in the trading market can be used for three purposes: First, to minimize losses on long or short positions (protective stops). Second, to protect profits on existing long or short positions (protective stops). Third, to establish new long or short positions. Buy stop orders are placed above the market, and sell stop orders are placed below the market price. Once the stop is triggered, the order will be treated as a "market order" and executed at the most favorable price possible.

Most stop orders are positioned and placed based on key technical support or resistance levels on the daily chart; if breached, they can significantly alter the near-term technical outlook for that market.

Knowing in advance the levels of buy and sell stop points allows active traders to better understand at which price levels the buying or selling pressure in that market will intensify.

The main advantage of using protective stops is that you have a clear idea of where you will exit if the trade fails before it even begins. If the trade is successful and profits start to accumulate, you may need to employ a "trailing stop," which involves adjusting the protective stop to lock in profits if the market moves against your position.