Synopsis:

BofA discusses the technical analysis for gold, anticipating a bullish trend with targets set for Wave-5 around $2733 while advising caution due to potential market corrections.

Key Points:

1. Current Wave Analysis:

   • Gold is in Wave 5, currently targeting levels between $2538 and $2643, with an extended upside risk reaching $2733.
   • The initial base case projected a rise to approximately $2368 in the first half of 2024, which has since been adjusted upward after reaching the target in April.

2. Technical Risks:

   • In Q4 2024, potential risks include stretched positions and a two-peaked RSI divergence, indicating possible overextension in the market.
   • Net non-commercial positions relative to open interest show long positions at an all-time high, suggesting the market could be vulnerable to corrections.

3. Investment Strategy:

   • BofA recommends buying gold on dips or corrections, considering the risk of position unwinds if the market adjusts.
   • Hedging some long positions may be prudent to mitigate potential downside risks.

Conclusion:

While BofA maintains a bullish outlook for gold with targets set towards $2733, they advise investors to be cautious and to consider buying on corrections to manage risk effectively.